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European exports stagnate due to the region's economic weakness

2024-02-22T19:03:00.449Z

Highlights: European exports stagnate due to the region's economic weakness. Sales abroad in the Old Continent barely grow by 0.8% during 2023. Without the effect of inflation they would have contracted. Imports in the EU as a whole fall by 5.5%, according to data published this Thursday by the OECD. In the last quarter of the year, the worst regional performance was led by France and the United Kingdom, where exports fell by 3.8 and 6.2%, respectively.


Sales abroad in the Old Continent barely grow by 0.8% during 2023. Without the effect of inflation they would have contracted. Imports in the EU as a whole fall by 5.5%, according to data published this Thursday by the OECD


In 2023, geopolitical tensions took their toll on European foreign trade.

Exports had three quarters of decline and it was only thanks to the good start to the year, when they grew by 2.4%, that sales in the Old Continent ended with a slight year-on-year increase of 0.8%.

This is a turnaround compared to what happened a year earlier, when exports rose sharply by 8.1%, according to international trade statistics published this Thursday by the Organization for Economic Cooperation and Development (OECD).

Imports of goods and services also fell by 5.5% in 2023, chaining six quarters of negative rates.

Although the document does not take into account the effect of inflation, it is foreseeable that if the increase in prices were contemplated, exports would have actually contracted.

This is explained by María Jesús Fernández, senior economist at Funcas, who assures that the volume of world trade and that of Spain has decreased in real terms.

In the last quarter of the year, the worst regional performance was led by France and the United Kingdom, where exports fell by 3.8% and 6.2%, respectively.

In contrast, Germany gained muscle and rose 1.6% between October and December, reflecting higher income from business services and information technologies.

On a year-on-year basis, the Germans, French and Italians were among the few OECD countries that recorded positive rates in their exports.

The data for Spain is not included because the statistics focus on the member countries of the G-20.

The foreign trade data coincide with the ups and downs of the European economy in the last year.

In this period it narrowly escaped recession thanks to a final quarter in which GDP stagnated, thus offsetting the 0.1% contraction observed in the previous three months, according to Eurostat data.

In this way, growth in 2023 as a whole was 0.5% in the euro zone and the EU.

As if that were not enough, the regional economy has entered 2024 with less vigor than expected, as confirmed by the European Commission in its latest winter economic forecasts.

These point to a modest growth of 0.9% for the European Union.

In parallel, it is foreseeable that tensions with China and trade sanctions against Russia will cool the exchange of goods and services and consequently trade flows will have to be redesigned.

G-20 foreign trade

The G-20, the club of the richest countries, has not emerged unscathed from the difficulties experienced last year, with the war in Ukraine, the energy crisis, industry problems and rate increases.

Its exports fell by 3.3% in the year, although in the last quarter it showed signs of stabilization - the rate was -0.1% - thanks above all to the recovery of the Southeast Asian countries, which compensated for the persistence of the sluggishness of Europe and the United States.

By country, US exports stagnated in the last quarter of 2023 as sales of industrial supplies offset the decline in automobile sales.

Its main commercial rival, China, obtained better results and recorded an increase of 0.6% at the end of the year, driven by high-tech products such as mobile phones.

Exports also increased in Japan and Korea due to strong car sales and a recovery in semiconductor activity.

Finally, increased raw material sales drove export growth in Australia, Indonesia and Brazil.

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Source: elparis

All business articles on 2024-02-22

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