Brexit is having no effect on British investment in Spain
The uncertainty generated by Brexit has not affected British investments in Spain. Since British citizens voted to break their links with the European Union in June 2016, investments from Britain have continued to grow. In fact, the United Kingdom has gone from being the sixth foreign investor in Spain to top of the ranking in the first six months of this year.
According to ICEX, specifically, since the Brexit referendum the United Kingdom has invested 10.786 billion euros in Spain, a figure that represents 12.4% of the total foreign direct investment (FDI) in the country. In regard to FDI flows, investment by British companies during the first half of 2019 was up 79.49% since the same period the previous year, to a figure of 3.125 billion euros.
Barometer on British investment in Spain
These figures are among the most significant results in the fifth barometer of climate and outlook for British investment in Spain, presented at ICEX’s head office by the British Chamber of Commerce in Spain. The report was prepared by Analistas Financieros Internacionales (AFI), who point out that the United Kingdom’s investment position has not been affected by Brexit.
According to the analysis of investment stock, 56.918 billion euros of British capital were invested in Spanish assets in the form of direct investment in 2017. This figure his up 2.4 billion euros since last year, making it the country with the second largest investment stock in Spain, behind the United States. Furthermore, this trend is on the rise.
Investment by sectors
The investment stock is mainly distributed in three sectors, with a clear predominance of the first: telecommunications, with 28.9%; the tobacco industry, with 10.9%; and the manufacture of basic iron, steel and ferroalloy products, with 8.7%. As noted by Hugh Elliott, the UK’s ambassador to Spain, these investments go toward maintaining over 200,000 jobs.
Together with Brexit, the economic slowdown occurring on a global level raises fears about investments among many economic actors. However, as explained by Emilio Ontiveros, chairman of AFI: “The rate of British investment in Spain remains high in the context of a global slowdown in FDI, even despite the unfavorable political scenarios in the United Kingdom and Spain” – in reference to the electoral processes underway in both countries.
Xiana Méndez, Secretary of State for Trade, concluded the presentation by highlighting the resilience of British investment in the face of uncertainty, and the strength of the relations between “two natural partners destined to get along”, and said: “The worst-case scenario of a hard Brexit is receding but there is still work to do”.