PEST ANALYSIS -SPAIN

This profile analyzes the political,economicsocial, technological (PEST) structure inSpain. Each of the PEST factors is exploredon four Parameters : current strength,current challenges, future prospects, andfuture risk.

OVERVIEW

Spain’s infrastructure is among the bestin the world, with two of Europe’s tenlargest airports being in Madrid andBarcelona.Country has 47 airports servicing 250airlines.

KEY FINDINGS

The country has one of the largestrailway networks on the continent.Spain has the largest number ofenvironmental agreements in place thathave been ratified by the EU.Portfolio investment has been majorsource of FDI inflow in to the country.

Political landscape Spain’s strict policy measures toreduce the deficit. EU has also sanctionedEUR 100 billion as bailout package. Tensions rising due to Rajoygovernment resulting in increased cuts inhealth care and education budget.

PEST HIGHLIGHTS

Economic landscape Liberalization is on track and limitedcompetition has been introduced in theenergy, electricity and telecom markets. Interest rates on corporate loans arehigh among the Euro area which createsunstability in corporate sector.

Social landscape Government initiated reforms in therigid labor market to make it flexible andcost competitive. AS of 2012, the GINI coefficient (ameasure of income inequality) ofhousehold disposable income stood at .35,one of the highest among OECD nations.

Technological landscape Spain boasts one of the largest mobilemarkets in Europe. It has well established4G networks. Low level of innovation in Spain isreflected by the low number of patentsregistered (711) in 2014, compared toFrance and Germany which registered 6083and 15498 patents respectively.

Analysis revealed that Spain has a highrate of unemployment which results inadverse affect on economic growth.Despite of various shortcomings, Spain hasnumerous strong points:• Favourable geographic location.• Strategic location attracts FDI’s.• Strong tourism industry (ranked as 2nd

largest earner worldwide after the US).

CONCLUSION