Thursday, 10 May 2012

Foreign investment in Spain hit with big downturn

SPAIN The international media is full of references to Spain's economy, none of it good. So it is not a surprise that foreign investment has dropped dramatically after an eight-month downward trend. The latest figures available are for February 2012, according to data released by the Bank of Spain on Monday. A net €128.655 billion has been pulled from the country by international investors since July last year. The figure for February alone was €25.548 billion. According to a report in El País, an employee for the Pimco European fund manager, says that Spain's is the first price "you look at every morning, no doubt.">>>The reason for the fall, still according to Pimco, is Spain's loss of competitiveness, growing public debt and a weak banking system. This before the news that Bankia, a large financial entity that is an amalgam of smaller banks and cajas, is to be nationalised.

Foreign investors removed some €13.460 billion in loans and deposits, while Spanish investors sent €11.349 billion overseas. Outflows of funds held by foreigners in bonds and shares amounted to €3.883 billion, while Spanish investors bought 2.177 billion of these instruments overseas, acording to El País. Investments by foreigners in Spanish government bonds dropped almost 22 percent to 219.601 billion euros. At the end of March 37.5 percent of state debt was held by foreigners, down from 50.5 percent at the end of December.

No comments: