Catalan exports dodge covid and achieve new record
Generalitat forecasts foreign sales will exceed 2019 figures by 6%
BarcelonaCatalan exports have managed to dodge the different covid variants for the time being, including Omicron, which is currently straining the health system. In fact, despite the restrictions at the beginning of the year, in summer and over Christmas, sales abroad will close the year with the best figures ever. The Catalan government claims exports will reach the record figure of €78bn. In other words, they will exceed by 6% figures obtained in 2019, the last year before the arrival of the pandemic. In addition, they will be 18% higher than 2020 figures, when restrictions were tougher, especially during the second quarter, when Spain was in lockdown and ports and airports worldwide were closed for several months. With these forecasts the sales of Catalan companies abroad will record the highest value since records began in 1993.
The government forecasts are much more optimistic than the previous estimates made by the Catalan executive (five points higher) and also those announced by both the World Trade Organization (WTO) and the International Monetary Fund (IMF), which foresee that 2021 will close with a year-on-year increase of 10% worldwide. Precisely, the Department of Enterprise and Employment has highlighted in its statement that Catalan exports will grow more strongly than the world average.
"When domestic consumption slows down, businessmen look for alternatives abroad," explains Xavier Brun, director of the master's degree in financial markets at the UPF-BSM. In this sense, Brun recalls that during the banking crisis, in 2011, 2012 and 2013 sales abroad rose while domestic consumption plummeted.
If forecasts are confirmed, exports will recover their usual pre-covid trend, when Catalonia achieved records for ten consecutive years. This dynamic was truncated by covid, which caused a 10.3% year-on-year decrease in sales in 2020. The last drop before the pandemic occurred during the banking crisis, in 2009, when foreign trade fell by almost 18% (see graph).
Professor of economics at Universitat Pompeu Fabra José García Montalvo argues that this year's good figure are partly due to the fact that exports accumulated during 2020, when more severe restrictions around the world impeded them. He also noted that in recent months exports have slowed a bit compared to the first part of the year.
"Growth will continue until stocks recover," he said. "In general terms, however, we can say that exports are dodging the different variations in covid", he adds.
Enterprise and Employment minister Roger Torrent maintains that the executive's upward revision of foreign sales demonstrates "the robustness of the Catalan export sector and its ability to adapt to changes in world trade". In this sense, he stresses that the Catalan economy is "fully inserted in the global value chain and, therefore, more exposed to these changes". "While it is true that it is more affected when world trade slows down, it also has a greater capacity to recover faster when it accelerates," Torrent added.
Leader in Spain
If the data are confirmed and the same pattern that has been repeated throughout this 2021 is maintained, Catalonia will end the year being the engine of foreign sales in Spain, since it concentrates a quarter of all state exports. By sectors, if there are no significant changes, it is expected that the chemical industry, which in turn is one of the main engines of the Catalan economy, will continue to lead exports, with good figures also registered by the food industry.