Spain Market Bulletin – Q1/2025

The Vietnam Trade Office in Spain provides an updated overview of Spain’s market situation and bilateral trade between Vietnam and Spain.

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I. Spain’s Economic Overview

Spain’s economy continued its positive growth momentum in Q1 2025, reaffirming its position as one of the fastest-growing economies in the Eurozone.

In early March 2025, the Bank of Spain revised its GDP growth forecast for 2025 from 2.5% to 2.7%, citing strong economic recovery at the end of 2024, robust labor markets, and increased disposable income, leading to rising private consumption (up 1.2% quarter-on-quarter) and public spending (up 2.5%).

Tourism recovery, stable exports, and resilient domestic demand have all contributed to Spain’s economic performance in early 2025.

Inflation rose toward the end of 2024 due to higher energy and service prices, with the average CPI at 2.8%. However, in Q1/2025 inflation remained under control, within the European Central Bank (ECB) target range, maintaining stable domestic purchasing power.

The Euro-USD exchange rate—a key factor in Spain’s international trade—remained relatively stable during Q1/2025, influenced mainly by U.S. fiscal/trade policy developments and global geopolitical tensions. Exchange rate stability has supported Spanish exporters, reduced international transaction costs, and maintained a favorable investment environment.

Spain remains an attractive destination for international investors. According to the 17th Business Investment Climate Index Report (ICEX, February 18, 2025), 89% of foreign companies in Spain plan to maintain or increase their investments in 2025, despite global uncertainties.

However, investment growth remains moderate, potentially limiting long-term sustainability.

The Spanish Government has also approved a €14.1 billion trade restart and recovery plan to counteract the effects of U.S. tariff increases on European goods, including loans, liquidity support, industrial modernization, and SME export assistance (€7.72 billion of which was approved in early April 2025).

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II. Spain – Vietnam Trade Relations

1. Spain’s Overall Trade Performance

Spain’s foreign trade maintained a positive outlook in Q1/2025, though export growth slowed compared to 2024.

Key export sectors: automotive, machinery, pharmaceuticals, food (olive oil, wine), and textiles.
Main trading partners: France, Germany, Italy (accounting for ~60% of total exports), followed by the U.S., UK, China, and North African countries.

Exports in January 2025 reached €29.78 billion, up 1.8% YoY. Total Q1 exports are estimated at €95.11 billion, indicating moderate growth.

Top export industries (2024 data):

• Automotive and components: 17.6%

• Machinery and mechanical equipment: 11.8%

• Pharmaceuticals: 8.9%

• Food and beverages: 17.2%

• Chemicals: 8.7%

• Textiles and fashion: 5.4%

• Electrical/electronic equipment: 4.6%

• Agricultural products: 3.9%

• Plastics and rubber: 2.8%

• Steel and fabricated metals: 3.1%

Imports in Q1/2025 are estimated at €105.26 billion, led by China, Germany, France, the U.S., and Italy.
Main imported goods: minerals, automobiles, electrical machinery, reactors, and pharmaceuticals.

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2. Vietnam–Spain Bilateral Trade

Bilateral trade remains on a steady growth path. In 2024, total trade reached USD 4.71 billion, up 19.5% YoY, with Vietnam’s exports at USD 4.0 billion (+21%) and imports at USD 0.71 billion (+14.2%), resulting in a trade surplus of USD 3.29 billion.

Vietnam ranks among the largest Asian exporters to Spain—behind only China and India—and is Spain’s top trading partner in ASEAN.

Key Vietnamese exports to Spain:

• Phones and electronic components

• Machinery and equipment

• Textiles and footwear

• Seafood and coffee

• Furniture

Main imports from Spain:

• Machinery and industrial equipment

• Pharmaceuticals and chemicals

• Processed foods and meat products

During the official visit of Spanish Prime Minister Pedro Sánchez (April 8–10, 2025), both sides discussed enhancing economic, trade, and investment cooperation under the EU-Vietnam Free Trade Agreement (EVFTA) framework.

Despite progress, bilateral cooperation remains below potential — trade volume accounts for only 0.7% of Spain’s total trade and 0.6% of Vietnam’s. Spanish investment in Vietnam remains modest, ranking 46th among 147 countries.

Complementary strengths:
Spain’s expertise in industry, renewable energy, and transportation infrastructure (especially railways) aligns with Vietnam’s development priorities.
Vietnam’s dynamic economy and strategic position in Southeast Asia make it a compelling partner for Spain’s market diversification strategy.

Challenges ahead for Vietnamese exporters:

• Increased competition as the EU pushes new FTAs with Mexico, Mercosur, Thailand, Indonesia, and the Philippines.

• U.S. tariff hikes on EU goods could disrupt re-export flows.

• Strong competitors from Latin America and North Africa in seafood, coffee, and wood products.

Nonetheless, the Vietnam–Spain trade outlook for 2025 remains positive, with both sides expected to deepen cooperation.

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III. Regulatory Updates in Q1/2025

Spain implemented several new regulations affecting trade and investment:

• APA/229/2025 (March 10): Animal health protection measures (Bluetongue disease).

• Royal Decree 140/2025 (Feb 25): Inter-ministerial committee on sustainable development and global solidarity.

• Royal Decree 91/2025 (Feb 11): Energy management, climate change, and air quality.

• Royal Decree 70/2025 (Feb 4): Revises animal by-product transport and registration regulations.

• Royal Decree 88/2025 (Feb 11): Meat classification and price reporting.

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IV. Trade and Investment Promotion Events in Spain (2025)