ING International Trade Study

Developments in global trade: from 1995 to 2017

Spain
Executive summary

Spain is expected to grow on average -0.5% in the coming years. This is relatively low compared to the average of other
European countries and also relatively low compared to the global average of 3.7%. Because of its own economic growth and
that of its main trading partners, Spanish exports are expected to grow 7.1% annually to US$ 462 bn in 2017, making Spain the
22nd largest exporter worldwide. Similarly, import demand will grow with an average of 5% per year to US$ 500 bn in 2017,
meaning that Spain will take the 19th position on the global list of largest importers. By 2017, Spain will mainly import fuels,
chemicals and basic food, which together account for 34% of total imports of Spain. Similarly, Spain's exports will mainly consist
of road vehicles & transport equipment, basic food and chemicals. Together these products will represent 48% of total exports in
2017. By 2017, Spain will mainly import products from Germany, France and China, which together account for 33% of total
imports of Spain. Spain's main export markets will be France, Germany and Portugal. Together these countries will account for
43% of total exports in 2017.

About the International Trade Study by ING

The ING International Trade Study aims to help ING’s (inter)national clients develop their knowledge and capabilities for doing
business across borders, and to contribute to the public debate on internationalization. We do this by generating valuable insights
on the current and future economic trends and international trade developments worldwide.
This report is part of a series of ING 2012 International Trade Study reports, which includes forecasts for 60 different country and
13 product group reports. These reports document trade developments over the past years and the ING forecasts (2012-2017) for
future international trade patterns and business opportunities, by partner country and export product. These forecasts are derived
from a model specifically developed by the ING Economics Bureau (see also Methodology), and complemented with the in-depth
knowledge of ING economists in our offices around the world.
 International Spain 2011
Trade Exports by region

Economy
2012F 2013F 2014F CIS
North EU 1%
GDP growth (real): -1.3% -0.9% 0.8% America 70% Asia
GDP nominal (bn): $ 1,398 $ 1,422 $ 1,459 4% 10%

Exchange rate* EUR/USD 1 1 1

Africa
Inflation: 2.5% 2.3% 1.4%
5.4%
GDP composition by sector 2010
Agriculture: 2.7%
Industry: 26.0% South America
5% Oceania
Services: 71.3%
0.7%
Population
2011 2030
Population (mln): 46.1 50.0

GDP per capita: $ 30,150 Exports (bn) $299 Imports (bn) $361 Trade balance (bn) -$62.29 Exports % of GDP 21%

Unemployment rate (avg.): 21.6%

Trade by products (bn)
Employment (mln persons): 18.398
Animal and vegetable
Food & live animals Beverage & Tobacco
oils
Exports $40.66 Exports $4.40 Exports $4.76
Other indicators
Imports $32.78 Imports $4.63 Imports $2.08
2011 2012 2013
Crude materials, Miscellaneous
Competitiveness rank WEF 36 36 Manufactured goods
inedible, except fuels manufactured articles
Ease of doing business rank: 45 44 44 Exports $7.89 Exports $57.29 Exports $26.33
Credit rating : Imports $16.55 Imports $45.19 Imports $39.77

S&P BBB-
Machinery & Transport
Moody’s Baa3 Mineral fuels Chemicals
equipment
Fitch: BBB
Exports $101.19 Exports $12.82 Exports $42.17
*end period
Imports $98.18 Imports $74.04 Imports $47.43

44
 Global economic growth forecast: Spain
GDP growth
Spain

0.8

-1.3 -0.9
2012 2013 2014

Commonwealth of
United States
Independent States

2.1 1.8 2.1

2012 2013 2014 4.0 4.1 4.2

European Union
Central and Eastern Europe
-0.2 0.5 1.5 2012 2013 2014

2012 2013 2014 2.0 2.6 3.2

2012 2013 2014

MENA
Developing Asia

5.3 3.6 3.8

South America
2012 2013 2014

3.2 3.9 4.1

6.7 7.2 7.5

2012 2013 2014 2012 2013 2014

Economic growth in the coming years will remains sluggish in developed markets. Especially the Eurozone will only experience
limited growth as the region continues to struggle with the Eurocrisis. World output growth is strongly driven by emerging
markets, in particular China and other developing Asian countries.
Spanish growth is predicted to be below the European average, with -0,9% in 2013 and 0,8% in 2014.
Trade forecast
bn $ bn $
600 600

500 500

400 400

300 300

200 200

100 100

0 0
Total exports Total imports

2011 2017 2011 2017

Spain 1995 2011 2017 Spain 1995 2011 2017

World ranking 15 18 22 World ranking 15 14 19
CAGR 2012-2017 7.1% CAGR 2012-2017 5.0%

In the coming years, exports (in current dollar terms) are expected to increase with 7.1% annually. The rank of Spain in the
list of largest exporters worldwide will decrease to 22.

Demand for foreign products (imports) is also expected to increase in the next five years, with 5% annually. The rank of
Spain in the list of largest importers worldwide will decrease to 19.

Worldwide, the top three export and import countries in 2017 will be China, United States and Germany. The countries that
show the greatest increase in demand for imports of foreign products are Vietnam, Indonesia and Taiwan.
Spanish import demand Today (2012) Tomorrow (2017)
Spanish import origins The size of the bubble represents the size of imports
Demand for products: origins of imports
Main origins of imports, 2011 and 2017* By 2017, Spain will mainly
50
bn $ 2011 2017
50
import products from
45 45 Germany, France and China,
40 40 which together account for
35 35
30 30
33% of total imports of Spain.
25 25 In volumes, the most important
20 20 trade flows to Spain currently
15 15
10 10
include road vehicles &
5 5 transport equipment from
0 0 Germany, fuels from Nigeria,
and fuels from Saudi Arabia. In
the coming years, these flows
are expected to change with -
2%, 0% and -2% per year,
Top 10 largest import flows by product and country of origin* respectively.
Spain CAGR 2012-2017 Value 2011
Import product Origin mln $
Road vehicles & transport equipment Germany -2% |||||||||| 10652
Fuels Nigeria 0% ||||||| 7578
Fuels Saudi Arabia -2% ||||||| 7506
Industrial machinery Germany -1% ||||||| 7118
Road vehicles & transport equipment France 0% |||||| 6637
Basic food and food products France 0% |||||| 6128
Office, telecom and electrical equipment Germany -1% ||||| 5780
Chemicals Germany || 2% ||||| 5517
Fuels Russia | 1% ||||| 5397 *within the 60 countries and product flows
included in the study
Fuels Iran -13% |||| 4945
Demand for products: imports by product group
bn $
0 10 20 30 40 50 60

Basic food and food products

Beverages and tobacco

Agricult. raw materials

Textiles

Ores and metals

Fuels 2017
2011
Chemicals
2007
Pharmaceuticals

Industrial machinery

Office, telecom and electrical equipment

Road vehicles & transport equipment

Other manufactures

Other products

0 5 10 15 20 25 30 35 40 45 50

By 2017, Spain will mainly import fuels, chemicals and basic food, which together account for 34% of total imports of
Spain.
Note: the sum of flows from 60 countries included in the
study
Where do Spanish products go to? Today (2012) Tomorrow (2017)
Spanish export markets The size of the bubble represents the size of exports
Exports: key destination markets
Key destination markets of exports, 2011 and 2017* Spain's main export markets
100
bn $ 2011 2017
100
will be France, Germany and
90 90 Portugal. Together these
80 80 countries will account for 43%
70 70
60 60
of total exports in 2017. In
50 50 volumes, the most important
40 40 export flows from Spain
30 30
20 20
currently consist of road
10 10 vehicles & transport equipment
0 0 to France, basic food to France,
and road vehicles & transport
equipment to Germany. In the
coming years, these flows are
expected to change with 9%,
Top 10 largest export flows by product and destination country* 6% and 2% per year,
Spain CAGR 2012-2017 Value 2011 respectively.
Export product Export partner mln $
Road vehicles & transport equipment France |||||||| 9% |||||||||||||||||| 18329
Basic food and food products France |||||| 6% ||||||||| 9511
Road vehicles & transport equipment Germany | 2% |||||||| 8984
Other manufactures France |||| 4% |||||| 6155
Basic food and food products Italy |||||| 7% ||||| 5819
Road vehicles & transport equipment United Kingdom ||| 3% ||||| 5392
Basic food and food products Germany |||| 5% ||||| 5332
Basic food and food products Portugal |||||| 6% ||||| 5234
Road vehicles & transport equipment Italy | 2% |||| 4399 *within the 60 countries and product flows
included in the study
Chemicals France ||||||| 7% ||| 3956
Exports: key product groups
bn $
0 10 20 30 40 50 60 70 80 90

Basic food and food products

Beverages and tobacco

Agricult. raw materials

Textiles

Ores and metals

Fuels 2017
2011
Chemicals
2007
Pharmaceuticals

Industrial machinery

Office, telecom and electrical equipment

Road vehicles & transport equipment

Other manufactures

Other products

0 10 20 30 40 50 60 70 80 90

By 2017, Spain's exports will mainly consist of road vehicles & transport equipment, basic food and chemicals.
Together these products will represent 48% of total exports in 2017.
Note: the sum of flows to 60 countries included in the
study
Methodology and data considerations

Our forecasts are derived from an econometric model of international trade in goods among 60 countries.
Trade among these countries represents 87% of world trade in goods classified by SITC excluding SITC 9.
• Data (1990-2011) for exports from and among 60 countries (forming 3600 country pairs) at the SITC(rev.3)
2-digit product classification were obtained from UNCTAD International Trade Statistics.
• These were combined with several macroeconomic variables, including GDP, GDP growth, and unit labour
costs (GDP/capita) (for both the origin and destination country; source: IMF), as well as geographical
distance and cultural distance between the two countries in each country pair (source: CEPII; Hofstede).
• Forecasts for macroeconomic variables (GDP, GDP growth and ULC) for the 2012-2017 period were based
on our own ING forecasts.
• The trade forecasts were derived from a single equation ADL, explaining 90% of the variance in the
dependent variable, specified as follows:
LogExportsijkt   j   d  1 LogExportsijkt 1   2 LogExportsijkt 1    3 d LogExportsijkt 1  d  X ijkt   ijkt
2

where LogExportsijkt represents the logarithmic value of exports of country i to country j of product k at time t;
αj the set of partner fixed effects, αd the set of product group fixed effects, LogExports x d the set of interactions
between LogExports and the product group binary variables d, and X the set of independent variables with their
vector of coefficients γ; and εijkt the residual.
The set of independent variables (X) includes (the log of) GDP; GDP growth and ULC for the reporter (i) and partner
countries (j) and the geographical and cultural distance between them.
Disclaimer

The views expressed in this report reflect the personal views of the analyst(s) on the subject on this report. No
part of the compensation(s) of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of
specific views in this report. This report was prepared on behalf of ING Bank N.V. (“ING”), solely for the
information of its clients. This report is not, nor should it be construed as, an investment advice or an offer or
solicitation for the purchase or sale of any financial instrument or product. While reasonable care has been taken
to ensure that the information contained herein is not untrue or misleading at the time of publication, ING makes
no representation that it is accurate or complete in all respects. The information contained herein is subject to
change without notice. Neither ING nor any of its officers or employees accept any liability for any direct or
consequential loss or damage arising from any use of this report or its contents. Copyright and database rights
protection exists with respect to (the contents of) this report. Therefore, nothing contained in this report may be
reproduced, distributed or published by any person for any purpose without the prior written consent of ING. All
rights are reserved. Investors should make their own investment decisions without relying on this report. Only
investors with sufficient knowledge and experience in financial matters to evaluate the merits and risks should
consider an investment in any issuer or market discussed herein and other persons should not take any action on
the basis of this report. ING Bank N.V. is a legal entity under Dutch Law and is a registered credit institution
supervised by the Dutch Central Bank (“De Nederlandsche Bank N.V.”) and the Netherlands Authority for the
Financial Markets (“Stichting Autoriteit Financiële Markten”). ING Bank N.V., London branch is regulated for the
conduct of investment business in the UK by the Financial Services Authority. ING Bank N.V., London branch is
registered in the UK (number BR000341) at 60 London Wall, London EC2M 5TQ. ING Financial Markets LLC,
which is a member of the NYSE, NASD and SIPC and part of ING, has accepted responsibility for the distribution
of this report in the United States under applicable requirements.

The final text was completed on 1 November

Disclaimer

The views expressed in this report reflect the personal views of the analyst(s) on the subject on this report. No
part of the compensation(s) of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of
specific views in this report. This report was prepared on behalf of ING Bank N.V. (“ING”), solely for the
information of its clients. This report is not, nor should it be construed as, an investment advice or an offer or
solicitation for the purchase or sale of any financial instrument or product. While reasonable care has been taken
to ensure that the information contained herein is not untrue or misleading at the time of publication, ING makes
no representation that it is accurate or complete in all respects. The information contained herein is subject to
change without notice. Neither ING nor any of its officers or employees accept any liability for any direct or
consequential loss or damage arising from any use of this report or its contents. Copyright and database rights
protection exists with respect to (the contents of) this report. Therefore, nothing contained in this report may be
reproduced, distributed or published by any person for any purpose without the prior written consent of ING. All
rights are reserved. Investors should make their own investment decisions without relying on this report. Only
investors with sufficient knowledge and experience in financial matters to evaluate the merits and risks should
consider an investment in any issuer or market discussed herein and other persons should not take any action on
the basis of this report. ING Bank N.V. is a legal entity under Dutch Law and is a registered credit institution
supervised by the Dutch Central Bank (“De Nederlandsche Bank N.V.”) and the Netherlands Authority for the
Financial Markets (“Stichting Autoriteit Financiële Markten”). ING Bank N.V., London branch is regulated for the
conduct of investment business in the UK by the Financial Services Authority. ING Bank N.V., London branch is
registered in the UK (number BR000341) at 60 London Wall, London EC2M 5TQ. ING Financial Markets LLC,
which is a member of the NYSE, NASD and SIPC and part of ING, has accepted responsibility for the distribution
of this report in the United States under applicable requirements.

The final text was completed on 1 November

To find out more, visit INGTradeStudy.com or contact:

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Martin van Vliet +31 20 563 9528 [email protected]
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