Standard & Poor’s predicts that Spain, Portugal and Ireland will all have current-account surpluses this year as they reform their economies after the sovereign debt crisis pushed them to seek bailouts.
The forecast is part of a report on countries’ progress in rebalancing growth published today. Since 2008, exports have risen 13.6 percent in Ireland, 4.4 percent in Spain and 4.6 percent in Portugal, according to S&P’s analysis.
“Peripheral European economies are adjusting externally with speed,” said Frank Gill, a credit analyst at S&P in London. “What’s more, with the significant exception of Greece, exports are leading this adjustment, while unit labor costs are falling back to more competitive levels.”
Data measuring countries’ rebalancing progress “are substantially higher in 2012 than in 2011, confirming an acceleration of external re-balancing amid declining unit labor costs,” S&P said. “This is not to understate the difficulties that lie ahead. We consider high unemployment a threat to cohesion across Europe.”
While Greece’s current-account deficit also shrank, the improvement was generated by reducing internal demand and imports, rather than improving exports. Greek imports are down 6.4 percent since 2008, while exports dropped 1.3 percent, S&P said.