Catalan exports grew by 3.1% in 2019 to €73.8 billion, setting a record for the ninth consecutive year. Exports have grown despite an unfavourable economic outlook, with an abrupt slowdown in the European economy, uncertainty surrounding the US-China trade war and a Brexit which has taken effect without the future of the UK’s trade and economic relations with the European Union having been clearly defined.
Against this backdrop, exports from the Spain as a whole grew by a modest 1.8%, while Catalan exports managed to dodge the slowdown and increased by even more than in 2018, when growth stood at 1.1%. What is more, Catalonia has once again taken the lead as the autonomous community which contributes the most to Spain's exports, with a total of 25.5%, four per cent up on 2018.
The figures show that Catalan industry has coped well with the economic slowdown. This in spite of the fact that European countries, the major recipients of Catalan exports, have suffered more from the challenging economic situation, with a more modest growth in their GDP than Spain. In 2019, some of Spain’s key European partners saw very slight increases in their exports, in line with their underwhelming economic growth. Germany, for example, saw its exports grow by just 0.8%, while in Italy the increase was 2.3% and 2.9% in France. The average across the euro area (1.9%) is also lower than Catalonia’s 3.1% increase.
More exports to Asia and the US
In 2019, Catalan exports grew mainly in Asia (+ 8.9%) and the US (+ 5.3%), while also increasing in the European market (+ 4.5%). A 3.6% hike in exports to the United Kingdom is also significant, in spite of the effects of Brexit. According to financial experts, the sharp increase in non-European markets is largely responsible for the fact that Catalan companies have continued to export at a decent rate. According to Joan Romero, the CEO of Acció (a government agency), ”Catalan companies have learnt to diversify and become competitive in markets where they previously did not have much of a presence".
Joan Tugores, Professor of Economics at the Universitat de Barcelona also believes that diversification is the key, both geographically and by sector. For Tugores "this explains why Catalan exports are coping well in this difficult context: diversification and a job well done by a large part of the business community, which is able to turn difficulties into opportunities". According to the economist, the fact that exports have increased in a challenging scenario "is very positive news which proves that the country has learnt that foreign markets are not incidental and that things are going well".
By sector, the sales record set by the pharmaceutical industry stands out, with a spectacular increase of 23.4%. Chemicals (€19.9 billion), capital goods (€12.7 billion) and food, beverages and tobacco (€10.2 billion) remain the sectors which are responsible for the success of Catalan exports. Nevertheless, imports also grew in 2019: up by 2.5% to €92.4 billion. The deficit in the Catalan trade balance continued to grow, although only by 0.1%.
Uncertainty for 2020
A great deal of uncertainty surrounds economic forecasts for 2020. Experts warn that the coronavirus could have an impact on the world economy and affect exports. However, there are also other risks, such as new tariffs imposed by the United States. After the first month and a half of the year, certain indicators point to a general economic slowdown and the International Monetary Fund (IMF) admits that the coronavirus could "derail" the economy. This Wednesday, Kristalina Georgieva, the Managing Director of the IMF, warned that "the recovery could be derailed by a sharp rise in the risk premium caused by a further escalation of trade tensions or if the coronavirus continues to spread".
Nonetheless, Professor Joan Tugores sends an optimistic message: he does not consider that the uncertainties in 2020 will necessarily lead to a drop in Catalan exports. "The figures for 2019 show that Catalan exports are resilient. They are able to remain dynamic despite adverse conditions", he said. However, Acció’s CEO foresees that the coronavirus outbreak could have a "significant impact" on the Catalan economy if Chinese customs remain partially closed for a prolonged period. As a result, he predicts that the next quarter will be "a tough one".