Spanish companies are being able to weather the almost total stoppage of the European economy with greater vigor than expected. Proof of this is that, in a context in which the economy of Germany and France – the country's two largest trading partners – has not grown at all, the sales of Spanish firms abroad have recorded their second best historical record.. In total, they exported goods worth 384,000 million euros, the second highest figure since records began.. A foreign sector that contributed a third of the national GDP growth in 2023. Of the 2.5% that the Spanish economy advanced in 2023, eight tenths corresponded to this foreign sector, that is, to the contribution made by exports compensated by the effect of imports.

These are two of the major conclusions of the foreign trade evolution report presented this Monday by the Secretary of State for Commerce, Xiana Méndez, at a press conference.. Méndez has highlighted these results in a turbulent external environment, with the shadow of the war in Ukraine still hanging over Europe, high interest rates, the global protectionist wave and tensions in the Red Sea.

For the Secretary of State, the keys to success have been the resilience of trade in goods, the recovery of tourism, the growth of other non-tourist services with high added value and foreign investment.. In 2023, Spain will once again register a surplus in trade in goods and services, something that has been happening uninterruptedly since 2011. That is to say, the difference between the services and goods that Spanish companies traded abroad and those that were imported from abroad was once again favorable.

However, if we go down to the level of merchandise, Spain once again registers a trade deficit that is fundamentally due to the country's energy dependence.. The oil and gas that the country needs to function comes from beyond its borders, which unbalances the balance.

In 2023, the trade deficit was 40,560 million euros, the vast majority due to energy imports. Although the imbalance has been reduced by 40% compared to 2022, which marked the maximum in 15 years due to the European energy crisis, it still remains at the highest levels of the last decade.

At the sector level, food, automobiles and non-chemical semi-manufacturing (in the case of Spain, ceramic products are very important) are the only activities that register surpluses.. In the rest, the result is deficient, especially in consumer manufacturing, capital goods and, above all, in energy products.

The pandemic has meant a before and after for the Spanish foreign sector. Since 2019, foreign sales of Spanish companies have increased more than among the majority of their business partners. Specifically, they have increased by 32%, a growth rate that exceeds those of the United Kingdom (16.4%), Germany (17.6%), France (20%), the United States (23%) or Italy ( 30.4%).

Less promising present and future

After two consecutive years in which exports have played a very prominent role in the country's economic growth, expectations for the medium term do not seem so promising.. The foreign sector contributed half of GDP growth in 2022 and a third in 2023. However, organizations such as the Bank of Spain predict that the foreign sector will have a negative effect on GDP growth in 2024 and a very modest effect in 2025 and 2026.. In these three years, household consumption will be the main fuel for the Spanish economy.

Does this mean that exports are drying up as an engine of growth? “Absolutely, no,” Responds the Secretary of State for Commerce, Xiana Méndez. “Even in the most complicated context, exports have shown signs of being a factor of dynamization and recovery,” he adds.. “Throughout 2024, what we will observe will be a more resilient foreign sector in the face of external shocks and protectionist measures,” he points out.

One of those shocks is unfolding in the Red Sea, where attacks on ships by Yemen's Houthi rebels have caused disruptions in this strategic corridor for global trade.. Insecurity has caused many ships to detour around the Cape of Good Hope, a longer and more expensive route for shipping companies.

The Government points out that the effects on trade have been observed since the end of November, with an increase in freight rates (the price charged for the transportation of goods).. Of course, Méndez believes that the situation is very different from the blockade of the Suez Canal in 2021.. In fact, a certain moderation has already begun to be observed in the price of freight, which has not reached as high a price as that recorded after the pandemic. “Today there is no shortage of containers,” he says.