In yesterday’s EL PAIS, new numbers for the Spanish current account are reported – and the news is good. Spain runs a current account surplus vis-a-vis the other euro zone members, and against the OECD combined as well. This is very important in the light of the underlying economic situation. It should be noted that rising exports are part of the change, with an increase of 18.5% which is higher than that of imports (12.4%). However, increased energy prices are a major part of the increase in the import bill, and countries exporting anything else to Spain will see their markets getting more difficult.
However, Spain still runs a current account deficit against the rest of the world, which is perhaps the more important indicator. However, while energy prices are nothing that lies within Spain’s control the current account reversal against the other euro zone members is a good sign that some adjustment takes place. It remains to be seen whether a) this trend continues and b) whether a lower price level of tradable goods has been the cause and goes together with lower (real) wages, which would increase the real burden of indebted Spanish households and lead to contractions in consumption while expanding exports.