Spain: Current account swings into deficit in February

Spain’s current account balance recorded a deficit for the first time in a year in February, which is traditionally a weak month for the country’s external account. The deficit, at EUR 0.2 billion in February, contrasted the EUR 0.4 billion surplus observed in January but was a substantial improvement from the EUR 1.1 billion deficit recorded in February of last year. In fact, the print represents the best February result seen in decades. In the 12 months up to February, the current account balance reached a surplus of EUR 23.5 billion, a fresh record high and well above January’s EUR 22.6 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 for a second month straight largely driven by a smaller deficit in net primary and secondary income. The surplus in goods and services was largely unchanged in February, with tourism-related services still making up for the bulk of the reading.

FocusEconomics Consensus Forecast panelists expect the current account balance to record a surplus of 1.3% of GDP in 2017. In 2018, the panel sees the current account surplus broadly stable at 1.2% of GDP.