Trade deficit narrows 56 percent on strong exports

The increasing dynamism of Spain’s export sector helped narrow the trade deficit by 55.6 percent in the first 10 months of the year, according to figures released Friday by the Economy Ministry.

The ministry said overseas shipments advanced 6.2 percent in the period to 196.608 billion euros and imports declined 2 percent to 208.974 billion. The export sector has been buoyed by downward pressure on wages, which has helped restore competitiveness. At the same time, imports remain weak as a result of anemic domestic demand due to high unemployment.

The export-to-import coverage ratio in the period January-October improved to 94.1 percent from 86.8 percent a year earlier. The deficit is largely the result of Spain’s heavy reliance on imported energy products. The energy deficit in the first 10 months declined 10 percent to 34.964 billion euros. Without energy, Spain posted a trade deficit in the latest reporting period of 22.598 billion euros, more than double the amount of a year earlier.

There was also an encouraging increase in exports to countries outside the European Union. Shipments to Asia increased 13.5 percent from a year earlier and by 11.9 percent to Africa. Non-EU countries accounted for 37.6 percent of total exports, with notable rises in shipments to South Africa, up 56 percent, and to Brazil, up 31 percent.