Bankia Estudios | As expected, the improvement in the external sector observed in the first two months of the year did not continue in March. The Covid-19 crisis hit both exports and imports hard, with setbacks of more than 14% year-on-year: only trade in chemical products, mainly medicines, and food was exempt from the contraction. In any event, the trade deficit continues the correction initiated in the final part of 2019: in the month of March it registered the sixth consecutive fall (13.4%), while the accumulated 12-month deficit continued to be around the minimum level of a year and a half (2.4% of GDP).
The deterioration in Spain’s export sector can be extended to neighbouring countries: the Q1’20 accumulated drop in Spanish exports (3%) is similar to the one noted in the EMU (3.2%) and Germany (3.3%), but much lower than that in France (8.6%).
The trade deficit declined by 13.4% year-on-year in March to 2.036 billion euros, as a result of the sharp drop, similar in intensity, in exports and imports, 14.5% and 14.4%, respectively: these are the largest falls since 2009 in the former, and since 2013 in the latter’s case.
In terms of volume, exports fell by 14.2% year-on-year, as their prices dropped 0.4%, while imports contracted by 12%, as their prices fell 2.8%. In the case of imports, while non-energy prices stabilised, energy prices plummeted by 19.2%, in line with the fall in oil prices.