Spain: Current account surplus moderates in January
March 31, 2017
Spain’s current account balance recorded a surplus of EUR 0.4 billion in January, which contrasted the EUR 0.4 billion deficit observed in the same month of 2016. The reading, however, was well below the EUR 3.7 billion surplus logged in December, a two-year high. In the 12 months up to January, the current account balance reached a surplus of EUR 22.6 billion, the highest reading on record and well above December’s EUR 21.8 billion surplus.
According to the Bank of Spain, the improvement seen in the current account balance compared to the same month of last year was mainly driven by a smaller deficit recorded in net primary and secondary income. The surplus in goods and services was largely unchanged in January, with tourism-related services still making up for the bulk of the reading. Although January marks a notable deceleration from December’s figure, seasonal factors are behind this phenomenon. The print actually represents the best January result seen in decades. This confirms the strong momentum in both the country’s buoyant tourism industry and Spanish external sector.
Author: David Ampudia, Economist