According to the report, prepared by the Nebrija Chair in Business Internationalization, the Foreign Direct Investment (FDI) in the Iberian Peninsula has followed the global trend of moderation and regionalization in the last two years. Gonzalo Solana, director of the Report, pointed out that FDI in the peninsula "has followed the patterns observed in international FDI: moderation and regionalization."
Although net FDI inflows to Portugal and Spain fell by 26% and 20% respectively in 2023, both countries have demonstrated remarkable dynamism in investment projects. Portugal recorded its second best historical figure in projects greenfield and remained in 2023 among the Top 20 global destinations for mergers and acquisitions operations (M&A) cross-border.
For its part, Spain positioned himself as the sixth largest country in the world with more projects greenfield and the fifth globally (third in Europe) in number of operations M&A cross-border, although the volume of associated investment has still not reached the 2018 peak.
Intensification of reciprocal investment
La cross-border activity between Spain and Portugal experienced a notable intensification. Spanish investment flows in Portugal grew by 34% in 2023 compared to the previous year, with a particular focus on retail, the hospitality sector, and manufacturing. Projections for 2024 indicate that this figure will be significantly exceeded.
Conversely, investment by Portuguese companies in Spain reached a all-time high in 2023 in projects greenfield, with 22 announced projects and a planned investment of $688 million, a figure that has already been surpassed in the first half of 2024.
Given this situation, the ambassadors of both countries called for cooperation. "The current international context makes it even more necessary for the Iberian countries to..." remain more united than ever and to be more ambitious in building a robust Iberian integration "through internationalization and in the defense of its interests in the European Union," they stated.
The presentation ceremony, which was attended by the Portuguese ambassador to Spain, José Augusto Duarte, and the Spanish director general of economic diplomacy, Jordi Colgan, reaffirmed the need for greater Iberian integration to strengthen global competitiveness.
The rise of non-tourism services and the technological challenge
The foreign sector is consolidating as a fundamental economic pillar for the Iberian economies. While exports of goods have been competitive and resilient to shocks, the report highlights the "increasing" geographical diversification of exports, despite the "high" concentration in the European market. It is also positive that progressive increase of the weight of exports with medium-high and high technological content.
Iberian exports of services show a very high competitiveness, especially the technological services and companies, with very favorable prospects. The expansion of foreign sales of non-tourist services has been driven by the digitally deliverable services, which is a "structural change of enormous significance" for GDP growth, employment and the internationalization of SMEs.
During the conference, Jordi Colgan, from the Spanish Ministry of Foreign Affairs, emphasized: “The Report shows the potential of our economies. From the Ministry We reaffirm our commitment to modern economic diplomacy”. For his part, José Luis Káiser, Deputy Director General of Commercial Strategy, identified Spain's main opportunity in the strength of its foreign sector, whose main challenge is "increase the technological content of our exports".
Finally, José Augusto Duarte, ambassador of Portugal, highlighted the potential for collaboration between both countries in Africa and Latin America to "gain more competitiveness on the world stage".
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