Majority of global investors see political instability main risk for investment in Spain

Eugenia Jiménez
clock • 3 min read

Political instability will be the main risk for investments in Spain during 2020, according to Kreab's latest research on the investment opportunities presented by the country. 

The study, which gathers the opinion of 62 national and international investors managing collectively over €380bn in assets, found that 83% of the respondents believe that difficulties to achieve stable political majorities may pose an investment risk.

But, despite their concern regarding the political situation, 85.71% of those surveyed would recommend to invest in Spain and give our country an average score of eight out of 10 as an investment destination.

Thus, more than half of investors consulted (60.71%) raised their investment volume throughout 2019, while 28.57% kept the same volume and 10.71% reduced it. Looking ahead to 2020, 44.45% of investors said they were planning to increase their investments in the country; 29.63% stated that they will keep it the same; and 14.82% plan to reduce it.

When referring to the economic sectors with the greatest growth potential in Spain, investors highlighted tourism, followed by health, real estate, energy, technology, consumer, financial services, industry, telecommunications and the automotive sector.


Upon asking investors about the main risks they would have to face investing in Spain, 83% of them highlighted political instability as one of their greatest concerns, followed by the situation in Catalonia, which is positioned as the second highest risk (43.33%) when it comes to allocate capital in the Iberian country.

However, 38% of investors consider that the political situation in Spain is in line with the average of the rest of the European countries and 45% consider it positive in relation to other EU countries.

Regarding the most urgent reforms needed to encourage investment in Spain, investors consider it necessary to give priority to a fiscal, followed by administrative division, labour and energy reforms. Other changes investors consider important to promote investment in the country include the pension and judicial systems. Additionally, they pointed out the importance of promoting digitalisation and facilitating SMEs' access to financing.


According to the survey, 23.33% of investors will refrain from investing in Catalonia as long as political tensions continue. Likewise, 30% say that the political situation in Catalonia has had a very negative effect when considering the Autonomous Community as an investment destination and 16.67% state it has had a slight negative effect.

However, there has been a certain improvement in the perception of the Catalonian conflict. These percentages are smaller than those obtained in the survey that Kreab conducted in 2017, when 55% of those consulted stated that they would not consider Catalonia as an investment destination due to the political situation. Results also showed that over 80% of them considered events in Catalonia would have a negative or very negative impact on their investment decisions in the region.

Regarding how the Catalan political situation might affect investment decisions in the rest of Spain, 33.33% of those surveyed believe that it would have a slight negative impact and 13.33% that it would have a significant one. On the other hand, 40% thought it would have no impact what so ever. These results also reflect a certain improvement over previous years.

Eugenia Jiménez
Author spotlight

Eugenia Jiménez

Eugenia Jiménez speaks Spanish and is Iberia Correspondent for Investment Europe covering Spain & Portugal, as well as Italy.