BarcelonaThe rise in energy prices and widespread inflation in the world’s major economies have exacerbated Spain’s trade deficit with foreign countries, according to the June report on foreign trade published by the Ministry of Industry, Commerce and Tourism However, despite also having a negative balance with third countries, the deficit in the case of Catalonia has been at levels similar to those before the pandemic thanks to the strong increase in exports.
The trade deficit with foreign countries
Difference between exports and imports with third countries in the first semester. Data in millions of euros
The figures for the first six months of the year in the case of Spain show a strong increase in the value of exports, but even more of imports. Specifically, the sales of Spanish companies abroad grew from almost 153,000 million euros during the first half of 2021 to almost 190,000 million in the same period this year, an increase of 24%. However, the external balance has worsened as imports grew at a much higher rate of 39% to more than 221 billion in the first quarter of this year, compared to 158 billion accumulated between January and June of last year.
This means that the Spanish trade deficit went from nearly 5.4 billion euros in the first six months of 2021 to 31.5 billion this year, six times more. It has almost multiplied by six. In 2018 and 2019 – the last two before the pandemic – the negative balance of the State with foreign countries was between 14,000 and 15,000 million euros, less than half of the current level.
Despite the increase in the deficit, the Spanish government has taken heart from the increase in exports. “Spanish foreign trade continues to show great dynamism, higher than that of most of the countries around us,” the Secretary of State for Trade, Xiana Méndez, said in a statement. According to Méndez, “the evolution of Spanish exports in the last month of June shows a very good behavior that reaches all sectors”.
In fact, the increase in the trade deficit is mainly due to the increase in the price of energy. Spain, like all the other countries of the European Union, is a net importer of raw materials such as oil, natural gas and coal, the price of which has skyrocketed following the Russian invasion of Ukraine, after of two years with very low prices due to the low demand during the pandemic.
According to data from the ministry, with the energy sector alone the external deficit of the State is more than 25,800 million euros between January and June, while the deficit of all other sectors of the economy together does not reach 6,100 million . Therefore, energy represents 78.5% of Spain’s negative balance with the rest of the world.
Catalonia, less affected by inflation
The Catalan economy also saw how between last January and June its trade deficit grew significantly, but it stood at nearly 9.2 billion euros, a figure lower than 9.7 billion in 2018 and almost 10.500 million in 2019, the last two years before the pandemic. However, as in the Spanish case, in 2020 and 2021 the restrictions on activity and the cheapening of raw materials reduced the negative balance to 5,700 million in 2020 and nearly 3,800 million in ‘last year.
The data, then, imply a return to pre-pandemic levels, but with the good news that exports registered a record level for the first semester that largely compensated for energy inflation. With sales to other countries, Catalan companies invoiced almost 46,300 million euros abroad, 16% more than in the same period of 2021, when the record was also broken.
On the contrary, imports also grew due to the aforementioned increase in energy prices, by 27%, up to 55.4 billion euros.
By sector, chemistry, capital goods and the agri-food industry were the main export drivers. “Despite the complexity of the international economic situation, the Catalan company is competitive and is well positioned in the world”, declared in a statement the Minister of Business of the Generalitat, Roger Torrent.