Spain | From the cyclical to the structural: Why are exports of goods not advancing?

Summary

Sales of goods abroad are 2.4% below the levels of two years ago. In that time, exports of services have increased by 24% and GDP has increased by 5.6%. This divergence is not normal.

Key points

• Key points:
• The cyclical recovery expected from the European economy next year will be favorable to exports of goods. The average quarterly GDP growth in the eurozone during the first nine months of the year would have been 0.3%, which in annualized terms implies growth of between 1 and 1.5%, similar to the growth forecast for 2025 (1.4%).
• However, the good performance of services exports in recent years suggests that the obstacles go beyond the cyclical.
• The drought has negatively affected the supply of the agri-food sector, and the pharmaceutical sector is undergoing an adjustment, after the strong growth observed during the pandemic.
• In addition, there are industries that continue to be negatively impacted by the effects of the pandemic or the increase in energy costs, such as clothing and manufactured intermediate goods (iron and steel).
• Another sector with problems beyond the cyclical is the automotive industry, where sales are well below the highs observed in 2018 and 2019.

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