Spanish exports surged to a record last year, narrowing the trade deficit to the least since 1998 even as the country’s recession worsened.
Exports totaled 222.6 billion euros ($297 billion), up from 215.2 billion euros in 2011, the Economy Ministry said in a statement handed out to reporters in Madrid. That’s the most since 1971. The nation’s trade deficit narrowed 34 percent to 30.8 billion euros in 2012, as imports fell 2.8 percent. In December, exports gained 4.6 percent from a year earlier.
“This has been made possible thanks to improvements in competitiveness,” Deputy Minister for Trade Jaime Garcia-Legaz Ponce said. “In addition to the exchange rate, the efforts made to conquer new markets have been important.”
Prime Minister Mariano Rajoy, in power since December 2011, is counting on exports to fuel an economic recovery as early as this year and enable Spain to avoid a full bailout. Measures such as labor-law changes to help companies cut costs are boosting investor confidence, he said last week.
Garcia-Legaz said he is confident exports will continue to increase this year. In 2011, Spanish foreign sales rose 15.2 percent from 2010.
Economy Minister Luis de Guindos expects data due Feb. 28 to show that Spain’s current account was nearly balanced in 2012. The nation, which ran the world’s second-biggest deficit during its debt-fueled housing boom that ended in 2008, posted its fourth monthly surplus since the start of the euro in December.
Spanish sovereign bonds have rallied since the European Central Bank pledged to do whatever is needed to defend the single currency in July, boosting foreign portfolio investment and holdings of government debt. Even so, the yield on Spain’s 10-year benchmark bond has risen about 40 basis points since a 10-month low of 4.84 percent on Jan. 11 amid uncertainty about the country’s public finances and economic outlook.