Spain: Current account reverses to deficit in January
March 27, 2013
In January, the current account balance incurred a deficit of EUR 2.6 billion, which came in below the EUR 4.7 billion shortfall recorded in the same month last year. The reading contrasted December's EUR 3.2 billion surplus and marked, in fact, the first deficit in four months. On a brighter note, Spain registered net capital inflows of EUR 30.4 billion in January, marking the fifth month in a row of positive figures.
The trade balance recorded a EUR 2.9 billion deficit in January, an improvement over the EUR 3.2 billion shortfall registered in the same month last year. Exports jumped 10.1% in annual terms, up from the 3.4% expansion recorded in December. Meanwhile, imports added 6.8%, contrasting the 9.3% drop recorded in the previous month.
The rebalancing process is key for the Spanish economy, as foreign investment and exports remain the only source of economic growth. FocusEconomics Consensus Forecast panellists expect a balanced current account in 2013. In 2014, the panel sees the current account balance rising to a 1.0% of GDP surplus.