A few days ago, it was reported that Spain’s goods exports grew by 24.4% compared with 2021 by the end of May this year, reaching nearly 156,000 million euros and marking a historic peak in volumes. This growth mirrors the pace recorded in the period before the health crisis disrupted the economy in 2019, while the province of Alicante, with its distinct production structure, also showed strong export gains of about 20.6% in the same five-month window, placing current values well above pre-pandemic levels.
While the rise of the dollar against the euro helped sales in several markets, inflationary pressures have intensified export figures when measured at prices excluding foreign sales. Yet, despite headwinds in international markets—such as the uncertainties from Russia’s invasion of Ukraine, sanctions, and lingering supply chain disruptions—foreign sales continue to propel economic growth with notable momentum.
On the import side, the depreciation of the euro against the dollar has made some imports more expensive. This contributed to higher prices for energy products and raw materials, while international logistics bottlenecks that persisted after the pandemic helped keep import values elevated. In fact, Spain’s goods imports rose by 40.7% year over year through May 2022, reaching a new high. Consequently, the trade deficit for January–May reached €26,569.7 million, a figure roughly six times higher than in the same period of 2021.
Recent data from INE show that turnover in Spain’s industry and services sectors grew cumulatively by 29.8% and 26.6% respectively up to the end of May this year. The figures are seasonally and calendar adjusted. While these are partial indicators, the latest twelve-month period reveals a clear uptick in activity, even as there are signs of a moderation in momentum in recent months.
There is also encouraging news from abroad. Indices from BBVA Research tracking bottlenecks in the transport system indicate clear improvement in the United States, a trend not yet fully visible in the Eurozone, though the effect may be temporary. Meanwhile, the price of container shipping has fallen for several months since its peak last autumn, albeit still well above pre-pandemic levels. This easing is a welcome signal for trade costs, though it does not erase existing frictions entirely.
In global markets, prices for several agricultural products and raw materials have begun to slide notably. Steel and iron ore are already cheaper than before the pandemic, and aluminum, wood, and copper have trended downward for weeks or months, staying above early 2019 levels. Soybeans, wheat, and corn have also eased after sharp increases earlier in the year, though they remain above pre-crisis benchmarks. Natural gas, however, remains stubbornly high, influenced by concerns about Russian gas supplies for the coming winter and the reactions of major buyers. The path for these commodities suggests a possible shift toward weaker global demand if monetary policy tightens or growth slows. Some markets anticipate rate cuts by the Federal Reserve as activity cools and inflation abates, which could moderate price pressures without severely hampering growth and employment.
The European Central Bank has joined the broader move toward higher interest rates, following action by policymakers in many regions. The risk is that attempts to curb inflation could slow economic activity and potentially cause fragmentation within the Eurozone if not carefully managed. The lack of a precise mechanism to prevent such fragmentation heightens uncertainty, leaving traders and policymakers wary about the near-term outlook.