Inflation does not hinder competitiveness and exports increased by 23% in 2022, a factor that also contributes to the best economic forecasts for 2023 that organizations give
The inflationary crisis into which the whole of Europe has plunged has brought about economic changes in all countries, both for citizens and for businesses. Spanish companies still managed to sell abroad more than ever, with total exports exceeding 389,200 million in 2022, 23% more than the previous year and a record in the historic series, over 100,000 million. before the pandemic broke out.
According to figures released this week by the Ministry of Industry and Commerce, the most exported products were mainly chemicals, capital goods, foodstuffs and cars. And they sold more despite being more expensive. So, of the 23% increase in exports, 4% is explained by volume (more units sold), but the remaining 18.5% by price. Even eliminating exported energy products (which have soared their costs this year due to the war in Ukraine), the prices of non-energy products have increased by almost 16% compared to 2021.
“The vast majority of exporting companies have been able to offer their products at higher prices to offset the increase in costs and not see their economic capacity suffer,” Xiana Méndez, Secretary of Commerce, said after the data was presented. Yet two in five companies claim their profit margins on their exports are “tight” due to inflation, according to a survey by the ministry.
Despite the international crisis, Spanish companies “have managed to adapt and maintain their market share abroad,” said Méndez.
Entrepreneurs are satisfied with the “good performance” of exports despite the “enormous difficulties of the world economy” in 2022. Antonio Bonet, president of the Club of Spanish Exporters and Investors, explains to this newspaper that exports grew because the companies ” have managed to raise prices and achieve record sales.” “Our companies have shown that they can pass on the increase in costs to their foreign customers,” he says.
Where do Spanish companies export? Mainly to the European Union, 63% of the total, and within the EU mainly to France. The neighboring country bought a total of 60,000 million euros worth of Spanish products in 2022, 15% of the total of all Spanish exports and 19% more compared to 2021. To get an idea of the size, this 60,000 million euros is practically the same amount as the purchases of the entire American and African continent together from Spain in 2022. Sales to Portugal (32,000 million, 29% more than in 2021) and Italy (31,500 million, 18.5% more).
It should also be taken into account that Spanish companies have sold more in a year marked by war, which has inevitably reduced exports to Ukraine and Russia. In other words, the companies whose exports went to one of these two countries in previous years have had to redistribute their sales to other countries. Specifically, sales to Russia fell by 42% throughout 2022.
Another major global power to buy less from Spain in 2022 is China, whose exports fell by 7.5%. According to Handel, this is mainly due to the decrease in pork purchases, 1,000 million euros less compared to the 2021 figures because they have recovered their own production after two years of pandemic in which they had to withdraw imports.
Inflation will be the biggest determinant for businesses and citizens in 2023, but the economy is ending the year better than expected a few months ago. This was predicted this week by the European Commission itself, which ruled out a recession both at the European level and in Spain and predicted that our country will grow by 1.4% in 2023, four tenths more than in its autumn forecasts.
European Commissioner for the Economy, Paolo Gentiloni, explained that the Spanish economy has weathered “relatively well the negative shocks caused by the war” by growing at 5.5% in 2022, one point more than had been calculated. Tourism has been the lever on which this intense recovery was based, and will continue to be so in 2023 and 2024, when they forecast 2% GDP growth.
And the Bank of Spain also wanted to update its calculations. The organization’s director of statistics, Ángel Gavilán, indicated at a conference before the Economic and Social Council this week that the entity will revise its GDP growth forecast for 2023 upwards by about three-tenths to 1.6%. In addition, according to his calculations, average inflation will fall 0.15 points until the year closes at 4.7% “if the VAT reduction on food is fully passed on in the price.”
Despite this good news, Gavilán made it clear that the improvement in the forecasts is not so much due to the good expectations about the Spanish economy, but rather to a mechanical adjustment following the latest information from the INE for the first and second quarter of 2022 (respectively two and eight tenths up), as well as a better-than-expected rise in the fourth (0.2%). Experts warn: Spain will face very high levels of deficits and debt this year, which could hamper the recovery despite the positive impact of European funds.
Even one of the fundamental pillars of this recovery, the foreign sector, is at risk if the export base does not increase. Antonio Bonet indicates that in Spain we only have 26,000 companies that regularly export more than 50,000 euros per year, highly concentrated in a few companies. “It is vital to broaden the export base and promote the increase in exports,” says Bonet, who also sees it as a priority “that SMEs can increase their size, as medium-sized companies are more likely to export, to innovate , attracting talent and quality work ».
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
