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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Spain has been in the midst of a balanced economic recovery in recent years; although the COVID-19 crisis led the country into an unprecedented downturn in economic activity, with the deepest contraction among EU member states. Nevertheless, the Spanish economy expanded firmly in 2021 (5.1%) and 2022 (4.3% - IMF), also thanks to the recovery of tourism activity and the resilience of the labour market. After decelerating towards the end of the year, GDP growth is set to remain subdued at the beginning of 2023. Headwinds are represented by high energy prices, low confidence of economic agents and an uncertain geopolitical context. The implementation of several reforms and investments under the Recovery and Resilience Plan are expected to lead to an increased dynamism in aggregate demand in the second half of the year, with overall growth projected at 1.2% for 2023, followed by 2.6% in 2024 as per the IMF forecast (1% and 2%, respectively, according to the EU Commission).

Spain’s public finances deteriorated swiftly as a consequence of the COVID-19 pandemic and the Russia-Ukraine conflict. Overall, the EU Commission estimates that the measures taken in 2022 to mitigate the impact of high energy prices (including the reductions of VAT on electricity and gas, the exemption from the tax on the value of electricity production, a 20 cent/litre fuel rebate and subsidies to low-income households and to certain economic sectors) amounted to around 1.6% of GDP. Such expenses were partially offset by increased tax revenue, resulting in a reduction of the public deficit to 4.5% in 2022 (it was 6.9% one year earlier according to the EU Commission). In 2023, the general government deficit is projected to narrow further (4.2%) amid a weaker macroeconomic scenario. Similarly, the debt-to-GDP ratio, at 113.6% in 2022, is expected to follow a downward trend in the forecast horizon, at 112.1% this year and 110.1% in 2024 (IMF), although the country's net foreign debt remains among the highest in the European Union. On the back of a strong increase in energy and food prices, inflation reached 8.8% in 2022 but showed signs of deceleration towards the end of the year. The IMF expects it to slow gradually to 4.9% and 3.5% in 2023 and 2024, respectively, but risks resulting from a more rapid wage adjustment and the relinking of pensions to inflation remain.

The Spanish labour market remained resilient during the pandemic. The unemployment rate is set to remain stable between 2022 (12.7%) and 2023 (12.3%), with a further decrease to 12.1% in 2024 (IMF). Wage growth should keep a slower pace than prices this year and only grow above inflation in 2024. Spain remains a country with strong inequalities: according to the latest data by Eurostat, 28% of the population was at risk of poverty or social exclusion in 2021 (the fourth-highest level in the EU), despite a relatively high GDP per capita (USD 46,551 in 2022 – IMF).

Main Indicators 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 1,275.941,428.331,400.521,492.431,560.05
GDP (Constant Prices, Annual % Change) -
GDP per Capita (USD) 26,94430,13429,42131,22332,513
General Government Balance (in % of GDP) -4.8-4.1-4.2-4.2-3.4
General Government Gross Debt (in % of GDP) 120.4118.4112.0110.5108.3
Inflation Rate (%) -
Unemployment Rate (% of the Labour Force) 15.514.812.912.612.4
Current Account (billions USD) 7.7513.6414.8413.3712.71
Current Account (in % of GDP)

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.



Main Sectors of Industry

Agriculture contributes around 2.6% of the Spanish GDP and employs 4% of the workforce (World Bank, latest data available). The country is home to almost one million agricultural and livestock businesses, covering 30 million hectares of land. Spain is the world's largest producer of olive oil and the world's third-largest producer of wine. The country is also one of the largest producers of oranges and strawberries in the world. The main crops are wheat, sugar beet, barley, tomatoes, olives, citrus fruits, grapes and cork. Livestock is also important, especially for pigs and cattle (accounting for 16% and 6% of the agricultural output components, respectively - EU Commission). Data by the Agricultural ministry shows that land destined for biological cultivation accounts for 10.79% of the total arable land, with 58.485 active operators in the sector (in production or distribution). The Ministry of Agriculture, Fisheries and Food (MAPA) has published the first estimate of the main economic figures for the agricultural sector. According to these data, agricultural income has reached EUR 27,861 million in 2022, which represents a decrease of 5.5% with respect to that of 2021 and an increase of 1.1% compared to its value in 2020. The ministry attributes the reduction to higher production costs due to the war in Ukraine and adverse weather conditions.

The industrial sector accounts for 20.4% of GDP and employs one-fifth of the active population. Manufacturing as a whole is the most important sector as it accounts alone for around 12% of GDP (World Bank), although factory activity in Spain shrank for six consecutive months in the second half of 2022 (data INE). The industrial sector is dominated by automotive, textiles, industrial food processing, iron and steel, naval machines, and engineering. New sectors such as outsourcing of electronic components production, information technology, and telecommunications provide high growth potential. The renewable energy sector is also growing at a fast pace. Data from INE show that Spanish industrial production increased by 2.4% in the whole of 2022.

The tertiary sector contributes 67.4% of GDP and employs 76% of the active population. The tourism sector is pivotal for the country’s economy, being Spain’s main source of income (although its contribution to GDP fell from a pre-COVID level of 12.4% in 2019 to 8% in 2021 - INE), as the country is the second-most popular tourist destination in the world. Tourism activity reached EUR 97,1 billion in 2021, as the typical branches of tourism generated 2.27 million jobs, 11.4% of total employment. The banking sector is also important and is composed of ten banking groups under the direct supervision of the Single Supervisory Mechanism (representing more than 90% of the industry) and 48 private banks, 2 saving banks and 61 cooperative banks supervised by Banco de España (European Banking Federation).

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 4.0 20.4 75.5
Value Added (in % of GDP) 2.6 20.4 67.4
Value Added (Annual % Change) 2.1 4.0 6.0

Source: World Bank - Latest available data.

Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.



Foreign Trade

Spain is open to foreign trade, which represented 68% of its GDP in 2021 (up from 60% one year earlier - World Bank). The country mainly exports motor cars (8.7% - 86% of the vehicles and 60% of the auto-parts manufactured in Spain were exported worldwide in 2021), petroleum products other than crude, medicaments, and vehicle parts; importing crude oil (6.9% of total imports), cars and vehicle parts, and medicaments (Comtrade).

According to official government data, in 2021 the main destinations for Spanish exports included France (15.9%), Germany (10.2%), Italy (8.4%), Portugal (7.9%) and the UK (5.9%); while imports came chiefly from Germany (11.2%), China (10.2%), France (10%), Italy (6.6%) and the U.S. (5%). Overall, the EU-27 represented 61.8% of total exports and 49.9% of imports.

The country's trade balance for merchandise is structurally negative due to high imports of fuel and high added-value goods; although the trade in services is generally positive. In 2021, Spanish goods exports reached USD 383 billion, up by 24.7% year-on-year, as opposed to USD 418.1 billion in imports (+28.6%). Trade in services followed a similar trend, with exports totalling USD 119 billion against USD 73 billion in imports (+32.8% and +21.2%, respectively – data WTO). In the same year, the overall trade balance of the country was positive by 1.5% of GDP (World Bank). According to the latest data available from the Spanish Institute of Statistics, in the first ten months of 2022 exports of goods grew by 23.6% year-on-year to EUR 319.7 billion, while imports increased by 38% to EUR 380 billion. In real terms, exports grew by 4.2% year-on-year, as export prices grew by 18.7%, while imports rose by 9.7% y-o-y, with import prices growing by 25.9%. Exports to the EU represented 62.4% of total exports and 44.2% of total imports in the reference period.

Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 351,981390,562372,750324,994418,176
Exports of Goods (million USD) 319,531346,754334,018307,015382,993
Imports of Services (million USD) 75,46581,82685,32460,25273,053
Exports of Services (million USD) 138,326155,355156,66689,641119,046

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 66.767.666.960.168.4
Trade Balance (million USD) -25,022-34,517-29,801-9,750-22,925
Trade Balance (Including Service) (million USD) 47,69538,48540,91118,68721,190
Imports of Goods and Services (Annual % Change)
Exports of Goods and Services (Annual % Change)
Imports of Goods and Services (in % of GDP) 31.532.432.029.333.4
Exports of Goods and Services (in % of GDP)

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change)
Volume of imports of goods and services (Annual % change)

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

International Economic Cooperation
Spain is a member of the following international economic organisations: IMF, European Union, ICC, Central American Integration System (SICA) (observer), WTO, Latin American Integration Association (LAIA) (observer), OECD, European Economic Area, among others. For the full list of economic and other international organisations in which participates Spain click here. International organisation membership of Spain is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Spain can be consulted here.

Main Partner Countries

Main Customers
(% of Exports)
France 14.9%
Germany 9.3%
Portugal 8.0%
Italy 7.8%
Belgium 5.9%
See More Countries 54.1%
Main Suppliers
(% of Imports)
China 10.5%
Germany 9.1%
France 8.6%
United States 7.1%
Italy 5.9%
See More Countries 58.8%

Source: Comtrade, Latest Available Data



Political Outline

Current Political Leaders
King: Felipe VI (since 19 June 2014), hereditary
President of the Government and Prime Minister: Pedro Sanchez (since June 2018), Spanish Labour Socialist Party
Next Election Dates
Senate: 30 November 2023
Congress of Deputies: 30 November 2023
Current Political Context

Since 2020, Prime Minister Pedro Sanchez of the Socialist Party (PSOE, 120 seats out of 350) has led a coalition government supported by Unidas Podemos (UP, far-left, 35 seats) and several smaller parties (including the Catalan separatist ERC).
In December 2022, the parliament approved the left-wing government's budget for 2023 which includes record levels of welfare spending. The budget also plans to invest the EU pandemic recovery funds in infrastructure and renewable energies. This was the latest budget law by the ruling coalition, as elections will take place in November 2023.

Main Political Parties
In the autonomous regions, several parties form coalition governments to garner more power. The December 2015 elections put an end to the two-party system. The main parties in the last elections held in November 2019 were:

- Spanish Socialist Workers Party (PSOE): centre-left, a democratic socialist party and the second oldest party
- People’s Party (PP): centre-right, sometimes referred to as the 'popular party'
- Vox: right-wing, Spanish Nationalist party
- Podemos ('We can' in Spanish): left-wing anti-austerity, born in 2014 and gaining traction
- Ciudadanos (Citizens' party - C’s): centrist to centre-right, liberalism.

Other significant political forces include:

- Republican Left of Catalonia- Catalonia Yes (ERC-Catsi): centre-left, catalan independentism
- Basque Country Unite (EHB): left-wing, Basque independentism
- Canarian Coalition (CC-PNC): centre- to centre-right, Canarian nationalism.

Executive Power
The King is the Head of the State and the commander-in-chief of the army; his role is mostly ceremonial. Following legislative elections, the leader of the majority party or the majority of the coalition is appointed Prime Minister by the Sovereign then elected by the parliament for a 4-year tenure. The Prime Minister is the head of the government. He is also called the President of the Government. He holds executive power which includes the execution of the law and the management of the routine affairs of the country. The Council of Ministers is appointed by the king on the recommendation of the Prime minister. There is also a Council of State which enjoys the role of the supreme consulting body of the government, but its recommendations are not binding.

The President of each Autonomous Community is from the majority party of the majority coalition winning elections of the Parliaments of the Regions which take place every 4 years. The President forms a government whose «ministers» are appointed under the title «consejeros» and seconded by a cabinet and director generals, etc. who are in charge of each Department heading the sectors for which the Autonomous Community has jurisdiction in substitution of the Spanish State (single administration).

Legislative Power
The legislative power is bicameral. The Parliament, called Cortes Generales, is made up of:
- The Senate which has 265 seats. Its role is that of representing the territories (Autonomous Communities and Departments). 208 senators are elected by proportional representation for 4 years. 57 senators are elected by parliaments of the 17 autonomous communities.
- Congress of Deputies which has a minimum of 300 seats and a maximum of 400 (currently 350). The deputies are elected by universal suffrage for 4 years from departmental constituencies. There are allotted one minimum representation and the remaining is proportional to their population. To avoid splitting up which is harmful to the stability of the Chamber, the D’Hondt system is applied.
The executive wing of the government depends directly or indirectly on the parliament's support, often expressed by a vote of confidence. The legislative power belongs to the government and the two houses of parliament at the same time. The Prime Minister does not have the authority to dissolve the parliament directly, but he can recommend its dissolution to the king. The Spanish citizens enjoy considerable political rights.
The 17 Autonomous Communities also have a legislative power exercised by their unicameral Parliament within the limit of jurisdictions fixed by each of their statutes.


COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
The summary of the EU’s economic response to the COVID-19 pandemic is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) in Spain, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.