2
THE CURRENT AND CAPITAL ACCOUNT BALANCES IN 2010
2
2.1
Overview1
THE CURRENT AND CAPITAL ACCOUNT BALANCES IN 2010
After the severe recession in 2009, the Spanish economy began to recover weakly in 2010.
Notwithstanding, as a result of the carry-over effect of the contraction in activity the previous year, average annual GDP fell back slightly by 0.1%. The recovery therefore came
slightly later and started less strongly than in other euro area countries, against the background of a pronounced upturn in international trade flows, following the previous year’s
collapse. Net external demand played a vital role in helping Spain out of the recession,
contributing 1 pp to GDP growth in 2010. This contribution was not however enough to
offset the contraction in domestic demand (–1.1% over the year). The Spanish economy’s
external net borrowing continued to shrink, albeit at a slower pace than in 2009, to stand,
on balance of payments data, at 3.9% of GDP (0.9 pp lower than the year before). The
decline in investment, which fell to 23% of GDP (down 1.5 pp on 2009), explains the lower
external borrowing requirement in 2010, as gross national saving remained at levels similar
to those recorded the previous year (19.1% of GDP).
The drop in net borrowing in 2010 was the result of the lower current account deficit
(4.5% of GDP, from 5.2% the year before) and, to a lesser extent, of the increase in the
capital account surplus (to 0.6%, 0.2 pp above its 2009 level) (see Chart 2.1). By heading, the improvement in the non-energy trade balance and the fall in the income account
deficit explain most of the correction in the external balance. Record high dividends from
foreign direct investment received from abroad by Spanish multinationals and low average annual interest rates meant that the deficit on the income account improved considerably last year. The balances of services and current transfers also performed well, while
the energy trade deficit worsened over the year due to higher oil prices (see Chart 2.2).
In the opening months of 2011, Spain’s net borrowing increased moderately on account
of the impact of the rebound in oil prices on the energy bill and of the widening of the
income deficit, which has begun to reflect the higher cost of financing recorded since
end-2010.
2.2
2.2.1
The current account
balance
The trade deficit increased moderately in 2010 to stand at 4.4% of GDP (a 0.4 pp rise on
the previous year) owing to the worsening of the energy component (whose deficit increased by 29%), as the negative non-energy balance fell by 20% (see Chart 2.2). Trade
TRADE BALANCE
with the rest of the world took place against a background of notably buoyant trade flows,
both of imports and exports, which recorded year-on-year increases of 15.4% and 16.3%,
respectively (see Table 2.1). Overall, both the pick-up in world trade and the competitiveness gains due to the depreciation of the euro against the currencies of Spain’s main trading partners and to the moderation of domestic costs and prices had a positive effect on
sales abroad. This offset the negative impact of the phasing out of the exceptional measures to stimulate demand introduced in some countries in 2009, especially the vehicle
purchase incentive schemes in the European Union. The rapid recovery of goods exports
meant that Spain’s share in world markets expanded slightly in real terms, according to
early estimates. Meanwhile, as for imports, their rise was supported by buoyant exports
and their profile over the year was influenced by the pick-up in domestic demand, which
overall was very moderate. According to the latest information these developments should
continue during the opening months of 2011 (see Chart 2.3).
1
BANCO DE ESPAÑA
19
For a more detailed description of the international and Spanish economic situation in 2010, see the Banco de
España’s Annual Report, 2010.
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
BALANCE ON CURRENT ACCOUNT AND CAPITAL ACCOUNT
CHART 2.1
CURRENT ACCOUNT BALANCE
BALANCES
% of GDP
% of GDP
2
6
4
2
0
-2
-4
-6
-8
-10
-12
-14
0
-2
-4
-6
-8
-10
-12
00
01
02
03
04
05
06
07
08
09
10
00
01
02
03
04
ENERGY BALANCE (a)
TRAVEL
INCOME
TOTAL
CURRENT ACCOUNT
CAPITAL ACCOUNT
NET LENDING (+)/ NET BORROWING (-)
05
06
07
08
09
10
NON-ENERGY BALANCE (a)
OTHER SERVICES
TRANSFERS
SOURCE: Banco de España.
a The energy and non-energy balance are a Banco de España estimate based on Customs data.
CONTRIBUTIONS TO THE NOMINAL TRADE DEFICIT (a)
CHART 2.2
BY GEOGRAPHICAL AREA
BY PRODUCT GROUP
€bn
€bn
10
10
0
0
-10
-10
-20
-20
-30
-30
-40
-40
-50
-50
-60
-60
2009
2009
2010
NON-ENERGY CONSUMER GOODS
NON-ENERGY INTERMEDIATE GOODS
CAPITAL GOODS
ENERGY GOODS
REST OF EU27
UNITED STATES
OPEC
NICs (b)
OTHER
2010
EMU15
JAPAN
REST OF THE AMERICAS
CHINA
SOURCE: Departamento de Aduanas.
a Contribution of each heading to the total change in nominal goods dejcit in €bn. Provisional data.
b South Korea, Taiwan, Hong Kong and Singapore.
As in previous editions of this report, the detailed analysis of the behaviour and structure
of foreign trade2 is based on the figures published by the Departamento de Aduanas e
Impuestos Especiales de la Agencia Tributaria (Spanish Customs and Excise Department),
which are the main data source for the compilation of the goods balance of the balance of
payments and the Quarterly National Accounts (QNA). Throughout the text, comparisons
between 2009 and 2010 data are based on the provisional series, as the final data for 2010
were not available when the report went to press.
a)
Goods exports
Goods exports were notably buoyant throughout 2010 and grew by 13.6% in real terms on
QNA data, constituting the main driver of the economic recovery. Customs data also
2
BANCO DE ESPAÑA
20
Appendix I to the report contains time series for Spanish foreign trade for the period 1999-2010, based on Customs data, broken down by product group and geographical area, and in greater detail than in this chapter.
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
TRADE BALANCE
Nominal rates of change
TABLE 2.1
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Receipts (exports)
18.5
4.5
2.7
3.7
6.6
6.0
11.3
9.6
0.2
-15.0
16.3
Payments (imports)
22.0
2.4
0.9
4.8
12.8
11.8
14.3
9.6
-1.8
-26.0
15.4
13.6
-3.6
4.0
16.7
21.6
13.5
14.6
15.0
15.5
-23.0
20.9
MEMORANDUM ITEMS:
World trade in goods
SOURCES: World Trade Organization and Banco de España.
TRADE BALANCE: COMPONENTS (a)
CHART 2.3
TRADE BALANCE (c)
EXPORTS AND IMPORTS (b)
% of GDP
%
20
0
15
10
-2
5
-4
0
-5
-6
-10
-15
-8
-20
-25
-10
-30
00
01
IMPORTS
02
03
04
05
06
07
08
09
10
00
01
02
03
04
05
06
07
08
09
10
EXPORTS
SOURCE: INE.
a Seasonally and calendar-adjusted data. Quarterly data base year 2000.
b Year-on-year rate of change. Real terms.
c Nominal terms.
showed a notable increase in exports – 14.5% in 2010, higher than growth in Spain’s export markets (10.1%). According to World Trade Organization (WTO) figures,3 world imports rose 13.5% in real terms in 2010, so Spain’s share in world exports is likely to have
improved slightly after two years of flat growth (see Chart 2.4). The increase in its share in
exports to the euro area offset the decline in Spain’s exports to the rest of the world. Nevertheless, in nominal terms, Spain’s share in world trade fell due to higher oil prices and a
weaker euro, which reduces the equivalent dollar value of the economy’s exports.
Strong export growth throughout 2010 seems to confirm evidence, derived from available
business data, indicating that firms reacted to the decline in world trade by adjusting average export volumes and, to a lesser extent, by halting their activity in external markets.
Such a strategy is likely to have enabled them to swiftly increase their sales abroad once
the world economy began to recover.
Throughout 2010 the main price-competitiveness and cost indicators improved vis-à-vis
the developed economies, as the euro depreciated against the currencies of those countries (see Chart 2.5 and Table 2.2). Moreover, the growth differential in unit labour costs
3
BANCO DE ESPAÑA
21
See World Trade Organization (2011), World Trade 2010, Prospects for 2011, press release 628.
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
SPANISH GOODS EXPORTS AND EXPORT SHARES
CHART 2.4
SPANISH REAL EXPORT SHARES
WORLD TOTAL (a)
%
%
20
15
4.2
1.2
4
1.1
3.8
1.0
3.6
0.9
3.4
0.8
10
5
0
-5
-10
-15
0.7
3.2
00
01
02
03
04
05
06
07
08
09
10
00
WORLD IMPORTS (b)
SPANISH EXPORTS
01
02
03
04
05
06
07
08
09
10
EXPORTS TO THE EURO AREA
EXPORTS TO THE NON-EURO AREA (right-hand scale)
SOURCES: OECD, Ministerio de Economía y Hacienda and Banco de España.
a Year-on-year real rates of change.
b Series weighted by these countries´ share in Spanish exports.
COMPETITIVENESS INDICES (a)
CHART 2.5
VIS-À-VIS THE EURO AREA (EMU16)
VIS-À-VIS THE DEVELOPED COUNTRIES
1999 Q1 = 100
1999 Q1 = 100
130
130
125
125
120
120
115
115
110
110
105
105
100
100
95
95
00
01
02
03
04
05
06
07
08
09
10
CONSUMER PRICES
MANUFACTURING PRODUCER PRICES
WHOLE-ECONOMY LABOUR COSTS
MANUFACTURING LABOUR COSTS
00
01
02
03
04
05
06
07
08
09
10
CONSUMER PRICES
MANUFACTURING PRODUCER PRICES
WHOLE-ECONOMY LABOUR COSTS
MANUFACTURING LABOUR COSTS
SOURCE: Banco de España.
a An increase (decrease) in the index denotes a loss (gain) in competitiveness.
across the entire economy declined in 2010, reflecting the moderation in wages the previous year. In comparison with other euro area countries, variations in price-competitiveness
indicators were modest, except in the case of unit labour costs (ULCs) for the entire economy, which fell considerably more in Spain.
The increase in exports was broadly-based across geographical areas, although sales
outside the EU were of particular relevance (especially those to China, Latin America, the
NICs and the CIS, and other central and eastern European countries) (see Table 2.3).
Spanish exports to euro area countries increased more moderately, despite the aforementioned increase in Spain’s export share. The relative weight of euro area exports in Spain’s
total exports fell in 2010 due to less buoyant exports to France and Germany, which offset
the strength of exports to Italy. Strong growth in emerging economies indicates the way
BANCO DE ESPAÑA
22
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
COMPETITIVENESS
Year-on-year rates of change, annual averages (a)
TABLE 2.2
RELATIVE PRICES
NOMINAL
COMPONENT
Unit labour
costs
Consumer
prices
COMPETITIVENESS INDICES
Unit labour
costs
(manuf.)
Producer
prices
(manuf.)
Export
prices
Unit labour
costs
Consumer
prices
Unit labour
costs
(manuf.)
Producer
prices
(manuf.)
Export
prices
3.2
1.6
0.3
2.6
1.7
3.4
1.8
0.6
VIS-À-VIS THE DEVELOPED COUNTRIES:
2006
0.3
2.3
1.5
2007
1.0
2.4
0.9
4.4
0.4
0.8
3.4
1.8
5.4
1.4
1.8
2008
1.5
1.7
1.0
1.8
0.8
-1.4
3.2
2.5
3.4
2.4
0.1
2009
0.3
-2.8
-0.6
-6.0
-1.2
-0.4
-2.5
-0.3
-5.8
-1.0
-0.2
2010
-1.6
-1.1
0.5
0.6
0.3
0.5
-2.7
-1.1
-1.0
-1.4
-1.2
4.4
Cumulative change on December 1998:
DEC 06
0.3
12.5
10.4
19.1
7.8
4.1
12.4
10.8
19.0
8.1
DEC 07
1.8
14.7
12.1
24.5
8.5
3.4
16.3
14.1
26.3
10.4
5.2
DEC 08
2.6
14.4
12.0
19.5
7.1
1.3
16.1
14.8
21.3
9.9
3.8
DEC 09
3.0
13.0
11.8
19.2
7.4
1.8
16.4
15.1
22.8
10.6
4.7
DEC 10
0.4
10.6
12.7
20.0
8.1
2.6
11.4
13.1
20.9
8.5
2.9
2006
2.5
1.5
3.4
1.4
0.5
2007
2.7
0.8
4.3
0.3
0.7
2008
1.4
0.9
1.0
1.1
-0.1
2009
-3.2
-0.5
-6.7
0.1
0.8
2010
-1.3
0.3
1.8
-0.2
0.1
DEC 06
12.0
9.1
17.6
5.9
4.5
DEC 07
14.4
10.6
22.4
6.6
4.3
DEC 08
13.5
10.4
15.7
6.3
3.0
DEC 09
12.1
10.5
16.1
7.3
4.9
DEC 10
9.0
11.4
17.6
7.3
4.9
VIS-À-VIS THE EURO AREA (EMU16) :
Cumulative change on December 1998:
SOURCE: Banco de España.
a Annual averages. A positive (negative) rate of change denotes a loss (gain) in competitiveness.
forward for the geographical diversification of Spanish exports. A more detailed analysis
of this diversification is given in Box 2.1.
The breakdown of real exports by product shows that the recovery of sales abroad was
supported by capital goods and intermediate goods, the items most adversely affected by
the collapse in world trade in 2009 (see Table 2.4). Real sales of capital goods rose by 24%
in 2010, mainly due to growth in exports of machinery and overland non-railway and maritime transport equipment. Consumer goods exports remained weak, contracting by 2%,
despite buoyant exports of cars and food. Meanwhile, energy intermediate goods exports
grew by 19% and non-energy intermediate goods exports by 26%, with exports of goods
used in the chemical and metal industries and, to a lesser extent, in manufacture of means
of transport performing particularly well.
The sectors with a higher propensity to export, which generally performed better in production terms in 2010, are expected to continue to have a higher propensity in 2011, in the
light of the notable rise in exports so far this year.
BANCO DE ESPAÑA
23
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
,,, GEOGRAPHICAL AREA
SPANISH FOREIGN TRADE BY
Nominal rates of change
TABLE 2.3
BY TYPE OF GOODS
TOTAL
CONSUMER GOODS
Ø
00-08
2009 (a)
2010 (a)
Ø
00-08
6.8
-15.9
17.4
5.7
OECD
6.2
-15.7
16.2
5.5
EU27
5.7
-15.9
15.4
…
United Kingdom
4.8
-24.5
15.1
4.5
Euro area (EMU16)
5.7
-13.7
15.0
…
Germany
4.2
-11.7
10.7
France
6.0
-11.7
12.4
Italy
5.4
-14.1
25.8
United States
5.7
-24.6
12.5
11.6
-9.5
11.0
CIS and other central and
eastern European countries (b)
7.1
-37.9
NICs (c)
4.2
Rest of the world (d)
7.3
2009 (a) 2010 (a)
NON-ENERGY
INTERMEDIATE GOODS
CAPITAL GOODS
Ø
00-08
2009 (a) 2010 (a)
Ø
00-08
2009 (a) 2010 (a)
EXPORTS:
TOTAL
OPEC
-7.3
0.5
1.3
-5.3
-1.6
0.3
-5.1
-0.4
…
-17.6
-5.6
0.4
-1.2
-0.5
…
2.8
3.3
-7.6
-1.7
5.6
1.5
-1.5
-0.3
4.3
1.2
-3.3
-2.8
5.7
-21.5
4.7
-2.4
7.6
-6.2
3.4
26.6
8.3
-48.1
10.7
25.2
7.7
-11.8
25.8
4.8
-18.8
17.0
8.3
-18.7
30.7
-23.0
17.6
-25.6
19.8
8.0
-21.1
33.0
…
-21.5
29.7
-37.7
-25.0
65.5
5.8
-28.3
37.5
18.5
…
-21.1
29.0
-20.3
0.9
6.5
-20.8
28.7
-33.0
33.6
8.0
-20.6
26.0
-17.0
35.8
8.1
-25.4
55.6
-2.5
-28.6
6.6
-26.0
25.8
12.8
-3.4
-1.2
12.6
-12.0
15.4
29.6
7.0
-34.5
13.9
5.9
-27.8
27.8
-2.7
14.6
0.5
177.4
8.7
3.4
-7.8
36.4
-10.1
21.9
1.8
-14.7
25.5
9.1
-8.6
25.9
IMPORTS:
TOTAL
8.2
-26.2
14.2
7.7
-9.2
-8.4
-0.5
-30.7
8.9
8.0
-28.6
25.1
OECD
6.1
-22.8
7.7
7.2
-10.4
-19.0
-1.4
-32.9
2.6
6.7
-25.5
23.1
EU27
5.9
-21.5
6.9
…
-10.4
-17.2
…
-33.4
0.5
…
-23.5
20.9
2.5
-23.9
10.7
4.4
-13.8
-20.2
-8.3
-36.0
29.5
1.9
-25.8
40.7
United Kingdom
Euro area (EMU16)
Germany
5.5
-22.6
4.6
…
-11.1
-19.8
…
-34.1
-2.2
…
-25.1
18.1
6.8
-25.1
-6.6
9.1
-13.5
-39.4
0.3
-31.3
-13.3
7.6
-29.1
16.7
France
2.6
-17.4
2.0
3.0
-3.1
-21.8
-4.7
-42.9
11.2
4.3
-20.7
15.6
Italy
5.9
-30.5
12.1
5.9
-19.5
-7.1
-0.6
-37.3
-3.7
5.6
-30.1
15.3
United States
4.4
-23.9
10.1
10.8
21.1
-65.8
-7.0
-30.8
0.3
5.3
-35.1
57.6
OPEC
16.4
-35.2
34.9
5.6
-20.3
5.5
-8.7
349.0
-73.9
7.9
-24.0
38.6
CIS and other central and
eastern European countries (b)
14.6
-43.4
23.1
-5.8
22.6
37.9
-12.6
-29.1
20.9
6.8
-31.7
11.2
5.4
-31.8
6.9
0.9
-19.1
-7.1
-1.9
-38.5
21.0
11.1
-42.4
20.7
15.2
-28.3
27.2
12.2
-4.5
21.0
12.1
-21.0
42.6
16.2
-42.0
35.7
NICs (c)
Rest of the world (d)
SOURCE: Departamento de Aduanas.
a Provisional data.
b Russia, Ukraine, Belarus, Moldova, Georgia, Armenia, Azerbaijan, Kazakhstan,Turkmenistan, Uzbekistan, Tajikistan, Kyrgyz Republic, Romania, Bulgaria, Albania,
Croatia, Bosnia-Herzegovina, Serbia and Montenegro.
c South Korea, Taiwan, Hong Kong and Singapore.
d Does not include headings without geographical assignment.
BANCO DE ESPAÑA
24
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
THE ROLE OF GEOGRAPHICAL DIVERSIFICATION IN THE RECOVERY OF GOODS EXPORTS
As described in Chapter 2, the share of Spanish products in international markets rose slightly in real terms in 2010, contrary to
what seems to have happened in other euro area countries (see
Panel 2) and despite Spain’s export markets – less oriented to
high-growth markets – growing less than world trade (10.1% and
12.4%, respectively). This box aims to identify the countries or
regions that were the main contributors to the growth in Spanish
goods exports last year and to assess whether there have been
any changes in their geographical pattern. An analysis of this type
is vital given the greater growth potential of emerging or developing economies.
Increasing globalisation and emerging market integration in the
world economy has stimulated considerable growth in the shares
in international trade flows of the countries affected. The high
growth potential of these economies and the fragmentation of production processes – made easier by new technological developments and better transport – have led multinationals to bolster
their presence in these areas and also explain why emerging economies’ imports accounted, in real terms, for around 46% of the
world total in 2010, compared with 31% just a decade before. Asia
– particularly China – and central and eastern European countries
recorded the largest increases in share in world trade. On CPB
(Netherlands Bureau for Economic Policy Analysis) data, emerging
markets’ goods imports grew, on average, by 8.5% a year during
the period 2005-2010, which was much faster than growth of developed countries’ imports (1.5% over the same period) (see the
first table in the box).
The data in the second table in the box show that, in nominal
terms, Spain’s exports have been oriented in recent years towards
countries outside the euro area, the share in total Spanish exports
of the newer EU Member States, Russia and the CIS countries,
and China has increased while that of Latin America has decreased slightly. Moreover, the weight of the euro area and the
United Kingdom in total exports fell by 6 pp over the last decade.
1 CONTRIBUTIONS OF NET EXTERNAL DEMAND TO YEAR-ON-YEAR GROWTH
OF REAL GDP
BOX 2.1
Spanish exports have therefore diversified towards highly buoyant
regions. Nevertheless, in terms of Spain’s export structure, the
weight of sales of goods to these countries remains small relative
to other developed countries, the only exception being Latin
America (see the third table in the box). Furthermore, according to
the results obtained when estimating a gravity equation for Spain’s
bilateral goods flows, exports to China and the industrialised
Asian economies are below levels that the characteristics of both
markets seem to indicate as appropriate, once variables such as
the physical and cultural distance between Spain and Asia have
been taken into account.1 This suggests that Spain is not making
the most of the growth opportunities in these markets. Firm-level
data available also suggests that, on average, Spanish firms export to fewer countries than their counterparts in the large EU
countries.
By geographical breakdown, goods exports to EU countries grew
at a lower annual rate in 2010 than sales to the rest of the world
(by 15% and 22% in nominal terms, and by 13% and 17%, in real
terms, respectively). Notwithstanding, given their considerable
weight in total exports, the contribution to the recovery in exports
of sales to EU countries was much larger (10.6 pp, against 6.8 pp
for the rest of the world). Although exports to China and to Russia
and the CIS countries grew at much higher rates than the average
in 2010, their contribution to the overall increase in total exports
was modest (0.4 pp each). Exports to China and Russia are envisaged in the comprehensive development plans set in motion by
the Ministry for Industry, Tourism and Trade, with a view to promoting Spanish trade and economic relations with regions where
Spain’s presence is still small. Latin America’s contribution was
larger, even when exports to countries in the region were less
buoyant.
1
See “Un análisis del destino geográfico de las exportaciones españolas
de bienes a través de una ecuación de gravedad” to be published shortly in the Banco de España’s Boletín Económico.
2 GOODS EXPORT SHARES (IN REAL TERMS)
%
%
10
110
8
100
6
4
90
2
80
0
-2
70
-4
60
-6
50
-8
2005
2006
2007
2008
2009
2010
98
99
00
SPAIN
FRANCE
EURO AREA
EXPORTS OF GOODS AND SERVICES
IMPORTS OF GOODS AND SERVICES (-)
NET EXTERNAL DEMAND
01
02
03
SOURCES: INE, Eurostat, OECD and IMF.
BANCO DE ESPAÑA
25
04
GERMANY
ITALY
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
05
06
07
08
09
10
THE ROLE OF GEOGRAPHICAL DIVERSIFICATION IN THE RECOVERY OF GOODS EXPORTS (cont’d)
In short, while the diversification of Spanish goods exports to
more buoyant markets is making a positive contribution to the
recovery in goods exports, the share of such exports in total ex-
BOX 2.1
ports is still small in comparison with the largest euro area countries. In some cases, such as Asia, these differences are not accounted for solely by variables (size of economy, cultural differ-
1 REAL WORLD IMPORTS
Annual % (average)
2000-2004
2005-2010
World imports
6.8
4.4
Developed economies (a)
5.1
1.5
United States
6.4
1.5
Japan
4.1
1.1
Euro area
4.3
1.3
Emerging economies
10.1
8.5
Asia
11.5
8.6
Central and eastern Europe
13.6
8.7
Latin America
3.7
7.8
Africa and Middle East
7.5
8.6
SOURCE: CPB.
a OECD, excluding Turkey, Mexico, South Korea and central European countries.
2 SPAIN'S GOODS EXPORTS: GEOGRAPHICAL BREAKDOWN
Structure
2010
Total (nominal) exports
Nominal rates of change
Change with
respect to
2000
100.0
EU
67.7
Euro area
Contributions to growth
2009
2010
2009
2010
-15.5
17.4
-15.5
17.4
-4.1
-15.5
15.4
-10.7
10.6
55.6
-4.0
-13.2
15.0
-7.4
8.5
Germany
10.5
-1.9
-11.0
10.7
-1.2
1.2
France
18.3
-1.0
-10.3
12.4
-1.9
2.4
8.8
0.1
-13.9
25.8
-1.1
2.1
Italy
Portugal
8.9
-0.1
-12.0
14.7
-1.1
1.3
12.1
-0.1
-24.8
16.9
-3.4
2.1
United Kingdom
6.2
-2.1
-24.6
15.1
-1.7
1.0
Other countries
5.9
2.0
-25.0
18.9
-1.6
1.1
Other non-euro area countries
Rest of the world
32.3
4.2
-15.5
21.9
-4.8
6.8
3.5
-1.5
-24.4
12.5
-1.0
0.5
Japan
0.8
-0.2
-16.8
16.9
-0.1
0.1
China
1.4
0.9
-7.7
33.1
-0.1
0.4
Latin America
5.0
-0.7
-16.0
27.3
-0.7
1.3
Other emerging
Asian countries
1.3
-0.2
8.5
25.2
0.1
0.3
Russia and the CIS countries
1.3
0.7
-46.4
33.3
-0.9
0.4
OPEC
3.8
1.2
-11.4
8.2
-0.4
0.3
United States
SOURCE: Departamento de Aduanas.
BANCO DE ESPAÑA
26
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
THE ROLE OF GEOGRAPHICAL DIVERSIFICATION IN THE RECOVERY OF GOODS EXPORTS (cont’d)
ences, language and geographical distance, etc.) which,
according to gravity models, determine trade flows between two
regions or countries. It is therefore of vital importance to identify
the factors which could be making it difficult for Spanish firms to
penetrate emerging markets. Research on Spanish exporters to
countries with no geographical or cultural proximity to Spain reveal that they are large firms, with previous experience in other
markets. Accordingly, a Spanish corporate base comprising
mainly small and medium-sized enterprises may therefore explain
the problems of increasing Spain’s presence in Asian markets. To
take full advantage of the anticipated recovery in the world econ-
BOX 2.1
omy, the obstacles encountered by SMEs in their pursuit of
growth opportunities must be tackled. Hence, the measures offering firms information on potential demand in new export markets and on the institutional aspects of these markets, and also
on the creation of consortia or cooperatives, would help overcome barriers to international expansion that may be associated
with a firm’s small size. The Government-approved reform of the
ICEX (Spain’s Foreign Trade Institute), which aims to increase the
number of Spanish exporters and raise the volume of exports to
countries outside the EU by 50% over the next ten years, is a step
in the right direction.
3 STRUCTURE OF GOODS EXPORTS BY GEOGRAPHICAL REGION (NOMINAL)
% of total
SPAIN
GERMANY
FRANCE
ITALY
2000-2004
2005-2009
2000-2004
2005-2009
2000-2004
2005-2009
2000-2004
2005-2009
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
73.3
70.0
64.4
63.5
65.1
63.7
61.3
59.7
60.1
57.5
44.6
43.4
50.6
50.0
47.2
45.5
2.5
3.4
7.6
9.4
2.8
3.9
5.4
6.7
TOTAL
EU
Euro area
Newer EU Member States
Russia and the CIS countries
0.8
1.3
2.4
3.8
1.1
1.9
2.0
3.5
China
0.7
1.1
2.4
3.4
1.2
2.1
1.4
1.8
South east Asian
emerging countries
1.4
1.3
3.1
2.9
2.8
3.3
3.3
2.8
Latin America
Other
5.1
4.8
2.2
2.3
2.7
2.3
3.1
3.1
18.8
21.5
25.5
24.0
27.1
26.7
28.9
29.1
SOURCE: IMF.
b)
Goods imports
The upturn in goods imports was weaker than that in exports, expanding in 2010 by 6.2%
in real terms on QNA data. Likewise, on Customs data, imports increased by 8.6%, after
contracting sharply the year before. Strong exports – particularly in sectors with a high
import content (such as the chemicals sector) – gave rise to a slight recovery in imports,
which also benefited from buoyant private consumption in the first half of the year, temporarily driven by the planned increase in VAT on 1 July. In contrast, higher imported goods
prices and weak domestic demand dampened imports.
By component, capital goods imports rose in real terms by 6%, after falling sharply in
2009, on account of buoyant machinery purchases except for machinery used in the
construction sector. Meanwhile, consumer goods imports fell more steeply in 2010,
by 10%, due partly to the decline in car purchases, which was not offset by the modest improvement in food imports. The sharp rise in imports of non-energy intermediate goods (22%) is accounted for by the increase in purchases of goods used in the
chemical and metal industries and, to a lesser extent, in the manufacture of means of
transport, sectors which are highly dependent on imported inputs. Lastly, imports of
energy goods rose moderately (by 5%), in line with the weakness of economic activity in Spain.
BANCO DE ESPAÑA
27
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
FOREIGN TRADE BY PRODUCT GROUP
Rates of change
TABLE 2.4
EXPORTS
IMPORTS
NonEnergy
Consumer Consumer
energy
Capital Consumer
Intermediate
intermeTOTAL
goods:
goods:
intermegoods
goods
goods
diate
food
non-food
diate
goods
goods
Capital Consumer
TOTAL
goods
goods
NonEnergy
Consumer Consumer
energy
Intermediate
intermegoods:
goods:
intermegoods
diate
food
non-food
diate
goods
goods
IN REAL TERMS (a):
Average 2000-2008
4.6
5.3
3.3
3.3
3.3
5.4
5.6
3.2
5.6
4.4
6.0
5.1
6.2
5.5
5.4
5.9
2009
-9.8
13.4
-4.6
-2.7
-5.6
-12.9
-12.5
-21.4
-17.4
27,0
-6.1
-2.6
-7.2
-20.5
-21.6
-16.0
2010
14.5
24.2
-1.9
6.9
-6.4
26.0
26.3
18.7
8.6
6.0
-10.2
1.9
-13.8
18.4
22.2
4.6
UNIT VALUE INDICES:
2.1
-0.7
2.1
2.4
2.0
2.7
1.8
16.3
2.5
-1.2
1.1
1.4
1.0
4.0
1.5
14.0
2009
Average 2000-2008
-6.8
-6.7
-2.8
-2.7
-2.7
-9.6
-7.0
-30.7
-10.7
-5.2
-3.4
-6.1
-2.6
-14.5
-9.0
-28.3
2010
2.5
-5.5
2.4
4.5
1.3
3.9
3.4
12.5
5.2
2.8
2.1
4.7
1.3
6.8
2.4
24.1
SOURCE: Departamento de Aduanas and Ministerio de Industria, Turismo y Comercio.
a The real export and import data for the last two years are provisional.
The analysis of nominal imports by geographical area shows that the recovery was based
mainly on purchases from outside the EU, while purchases from the euro area grew at
more subdued rates. Of particular note, given their volume, were imports from the CIS and
other central and eastern European countries, China, Latin America and the OPEC countries, owing partly to the offset of higher oil prices. Among the imports from the euro area,
those from Portugal and Italy recorded strong growth, while German imports declined
again. Thus, the share of euro area goods imports in total imports fell by more than 4 pp in
2010 (see Table 2.5).
2.2.2
BALANCE OF SERVICES
The balance of services surplus widened by 0.2 pp in 2010 to 2.6% of GDP. This improvement covers developments in non-tourism services, which recorded a surplus (0.1% of
GDP) for the first time since homogenous data became available in 1993, and, to a lesser
extent, the slight pick-up in the tourism and travel surplus (2.5% of GDP, about 0.05 pp
higher than in 2009).4 Both services receipts and payments rebounded from the previous
year’s levels, although growth was much weaker than in external trade in goods, rising by
6.2% and 4.8%, respectively, in nominal terms. During the opening months of 2011, the
growth rate of this balance of payments heading slowed somewhat, except for tourism
receipts, which followed an upward path.
In 2010 as a whole, tourism receipts rose, in real terms, by 2.5% on QNA data.5 In nominal
terms, the increase in tourism receipts was 3.9% on balance of payments data. As a result, the weight of tourism receipts in GDP increased slightly to stand at 3.7%, interrupting the progressive decline since 2000 (see Chart 2.6). Several factors contributed to this
positive result, including the higher spending power of tourists from some of Spain’s main
markets, the weakness of the euro against the dollar and sterling, and the aggressive
price-cutting policies practised by firms in the sector. According to the World Tourism
Organization (UNWTO), tourist receipts in 2010 performed better in Spain than in some of
its main competitors (e.g. Turkey, Croatia and Greece). Notwithstanding this overall positive
4
5
BANCO DE ESPAÑA
28
This heading includes travellers’ spending during their stay abroad, be they tourists or other types of travellers
(for example, excursionists or business travellers).
The framework of the Tourism Satellite Account [see National Statistics Institute (INE) (2010), Cuenta Satélite de
Turismo de España. Serie 2000-2009] must be used for a correct assessment of the effect of tourism on the
economy.
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
STRUCTURE OF SPANISH FOREIGN TRADE (a)
Percentage of total (in nominal terms). 2010
TABLE 2.5
BY TYPE OF GOODS (b)
TOTAL
Consumer goods
Capital goods
Intermediate
goods
EXPORTS:
TOTAL
100.0
34.9
8.5
56.7
OECD
78.0
39.0
7.3
53.7
EU27
67.7
40.3
7.1
52.6
6.2
45.4
7.6
47.0
55.6
40.7
7.1
52.2
United Kingdom
Euro area (EMU16)
Germany
10.5
37.7
6.0
56.2
France
18.3
45.8
7.7
46.5
Italy
8.8
37.0
6.9
56.1
Portugal
8.9
38.1
7.5
54.4
United States
3.5
32.7
5.9
61.4
China
1.4
11.1
10.1
78.8
OPEC
3.6
19.4
14.1
66.4
CIS and other central and eastern European countries (c)
2.3
39.1
11.7
49.2
NICs (d)
1.3
21.0
16.6
62.5
11.0
19.4
14.0
66.6
Rest of the world (e)
IMPORTS:
TOTAL
100.0
24.9
7.7
67.4
OECD
65.0
24.8
9.0
66.2
EU27
54.6
25.5
8.8
65.6
4.5
29.5
7.2
63.4
United Kingdom
Euro area (EMU16)
43.9
25.1
9.1
65.9
Germany
11.7
22.5
11.3
66.2
France
10.7
26.1
5.6
68.3
7.0
23.0
9.9
67.1
Portugal
3.6
30.9
5.5
63.6
United States
3.9
9.2
10.4
80.4
China
7.9
49.4
16.8
33.8
OPEC
10.3
2.0
0.1
97.8
Italy
CIS and other central and eastern European countries (c)
3.8
6.3
0.8
92.9
NICs (d)
1.6
31.0
10.5
58.6
11.8
35.2
2.9
61.8
Rest of the world (e)
SOURCE: Departamento de Aduanas.
a Provisional data.
b 3GDjFTQDRRGNVSGDRSQTBSTQDNESQ@CDkNVRVHSGD@BGNESGDBNTMSQHDRNQ@QD@RM@LDC
c Russia, Ukraine, Belarus, Moldova, Georgia, Armenia, Azerbaijan, Kazakhstan,Turkmenistan, Uzbekistan, Tajikistan, Kyrgyz Republic, Romania, Bulgaria, Albania,
Croatia, Bosnia-Herzegovina, Serbia and Montenegro.
d South Korea, Taiwan, Hong Kong and Singapore.
e Does not include headings without geographical assignment.
development, tourism receipts were temporarily – but severely – affected by a number of
events, such as the closure of European airspace for one week in spring following the eruption of a volcano in Iceland, the impact of extreme weather conditions during the last few
weeks of the year, and the strike by Spanish air traffic controllers also at the close of the year.
Sector indicators point to a clear preference among inbound tourists in 2010 for overnight
hotel stays, which had a positive effect on average spending per tourist, according to
BANCO DE ESPAÑA
29
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
TOURISM INDUSTRY INDICATORS
CHART 2.6
INTERNATIONAL ARRIVALS OF TOURISTS (b)
TOURISM RECEIPTS (a)
%
% of GDP
6
8
6
5
4
2
4
0
3
-2
2
-6
-4
-8
1
-10
-12
0
00
01
02
03
04
05
06
07
08
09
10
World
2008
Spain
Europe
2009
Western
Europe
Central
Europe
Medit.
Europe
2010
SOURCES: World Tourism Organization, Instituto de Estudios Turísticos, Ministerio de Economía y Hacienda and Banco de España.
a In nominal terms.
b Rates of change.
EGATUR,6 despite the shorter average stay. According to the Survey on Tourism Movements at Borders (FRONTUR),7 the number of foreign tourists entering Spain in 2010 was
only 0.9% up on the previous year, reflecting the declines in its two main markets, i.e. the
United Kingdom and Germany (–6.5% and –1.4%, respectively). This increase was smaller
than the one recorded in international tourist flows (6.7%, according to UNWTO estimates), with the result that Spain continued to lose ground as an international tourist
destination in 2010 to the benefit of its main competitors.8 More specifically, according to
WTO data, flows of tourists to Turkey, Croatia and, in particular, Morocco and Egypt seem
to have grown faster in 2009 (by 5.9%, 4.8%, 11.4% and 17.9%, respectively). On information available at the start of the year, the outlook for 2011 is quite positive, and is also
affected by tourists changing their destination of choice to Spain on account of the geopolitical instability in some countries in North Africa and the Middle East.9
Based on the Hotel Occupancy Survey (EOH),10 overnight hotel stays by tourists picked up
significantly throughout 2010 (see Table 2.6). This increase affected city destinations more
than the sun and beach segment, which is more sensitive to the strong competition from
the eastern Mediterranean countries. In fact, by type of accommodation, hotels were again
the most popular choice, their share in the total rising to 63%, showing a year-on-year
increase of 3.7% – owing mainly to the upturn in business travel – which contrasted with
6
The Tourism Spending Survey includes spending of tourists in the country of origin, which includes the international transportation expense. However, this is excluded from the balance of payments travel heading (but included under the heading of international transportation services).
7 Compiled by the Instituto de Estudios Turísticos (IET) to quantify and analyse inflows of tourists at Spanish
borders.
8 For more detailed information, see the WTO World Tourism Barometer, vol. 9, no. 1, February 2011, at: http://
www.unwto.org/facts/eng/pdf/barometer/UNWTO_Barom11_1_key_trends_web_en.pdf. In 2010, Spain fell
one place in the world ranking of international tourist arrivals to fourth, after being overtaken by China. Notwithstanding, in terms of tourism receipts, Spain remained in second place behind the United States.
9 According to government sources, the number of tourists travelling to Egypt has fallen by almost 25% due to
the disturbances at the start of the year.
10 The main aim of the Survey, compiled by the INE, is to ascertain the behaviour of a series of variables allowing
the essential features of the hotel industry to be known. Some of the main variables analysed are the number of
tourists, their overnight stays, average length of stay, number of establishments and level of occupancy, broken
down by nationality of tourist, category of hotel and autonomous region, etc.
BANCO DE ESPAÑA
30
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
TRAVEL
Rates of change
TABLE 2.6
Nominal receipts
Real receipts (a)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
10.3
5.5
-1.9
4.4
3.8
6.0
5.6
3.3
-0.4
-9.0
3.9
4.9
0.4
-6.5
0.1
0.1
2.3
1.6
-0.7
-4.3
-9.6
2.5
Nominal payments
17.0
13.1
5.4
4.2
22.0
24.1
9.4
8.3
-3.7
-12.6
4.8
Real payments (a)
11.0
11.0
2.4
2.9
19.4
20.6
5.9
7.2
-6.0
-13.4
2.6
Competitiveness index vis-à-vis the developed countries
measured in terms of consumer prices (b)
-1.3
1.4
2.3
3.8
1.6
1.5
1.7
1.8
2.5
-0.3
-1.1
-2.7
0.8
0.6
2.5
0.4
0.1
0.3
1.0
1.5
0.3
-1.6
1.4
-1.0
4.1
11.9
10.6
4.6
4.8
9.0
5.9
-5.3
4.0
Nominal component
GDP of developed countries (c)
MEMORANDUM ITEMS:
Number of foreign visitors lodged in Spanish hotels
Overnight stays by foreigners in Spanish hotels
Number of tourists (FRONTUR)
1.3
-0.5
-1.5
2.1
1.4
5.1
6.0
4.0
-0.1
-10.8
11.2
-3.5
-0.2
-5.3
0.7
-1.6
3.4
6.6
2.1
0.2
-9.6
8.1
2.1
4.7
3.6
1.0
3.1
6.6
3.7
1.1
-2.5
-8.8
0.9
SOURCES: OECD, IMF, INE, Instituto de Estudios Turísticos and Banco de España.
a Spanish Quarterly National Accounts jgures, base year 2000.
b Developed countries: Australia, Austria, Belgium, Canada, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Malta,
Netherlands, New Zealand, Norway, Portugal, Slovakia, Slovenia, Sweden, Switzerland, United Kingdom and United States.
c Aggregate GDP in dollars of all countries in nominal terms.
the fall in the number of tourists choosing to stay in their own properties, with friends or in
rented accommodation.
Regarding the profile of visitors to Spain in 2010, the vast majority continued to arrive by
plane (77% of the total). The use of low-cost airlines rose further, accounting for 55.2% of
all arrivals by air (a 5.2 pp increase on 2009). The percentage of visitors choosing not to
purchase a tourist package remained at around 70% of the total.
Tourism payments rose by 2.6%, in real terms, in 2010 on QNA data. In nominal terms, on
balance of payments data, the increase was 4.8%. This is the result of the upturn both in
the number of trips abroad made by Spanish nationals (as per FAMILITUR statistics)11
and in their overnight stays. Nevertheless, the prospects for 2011 are clouded by greater
uncertainty owing to higher transport costs and the continued weakness of household
spending.
Trade in non-tourism services picked up in 2010 – after falling significantly in 2009 – albeit to a lesser extent than trade in goods. The rebound was stronger in receipts than in
payments (with rises of 8% and 5%, in nominal terms, respectively), producing a modest
surplus for trade in non-tourism services for the first time (0.1% of GDP on balance of payments statistics). Both imports and exports of non-tourism services grew more moderately in Spain than in the EU (see Table 2.7).
The background to these developments was one of a recovery of international trade in
non-tourism services, albeit more moderate than that of trade in goods. On WTO data,
world exports of other services grew by 8.4% in nominal terms and trade in goods by
20.9%. Spain was seventh in the world ranking of total service exporters in 2010, with a
11
BANCO DE ESPAÑA
31
The aim of the Survey on Tourism by Spanish Nationals (FAMILITUR) is to study Spanish tourism, quantifying
and analysing the trips made by Spanish residents, both within Spain and abroad.
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
SERVICES BALANCE COMPONENTS
Nominal rates of change
TABLE 2.7
RECEIPTS
EU27
TOTAL SERVICES
PAYMENTS
SPAIN
EU27
SPAIN
2009
2010
2009
2010
2009
2010
-8.8
9.9
-9.7
6.2
-8.1
8.8
2009
2010
-12.7
4.8
Travel
-7.5
7.1
-9.0
3.9
-7.8
1.3
-12.6
4.8
Other services (a)
-8.9
10.2
-10.2
8.0
-9.2
11.0
-12.8
4.9
-20.7
17.6
-17.4
13.1
-21.2
22.5
-24.4
15.8
1.3
19.1
-0.4
5.0
2.0
10.9
-5.0
-7.2
-2.4
0.4
-17.7
4.3
11.4
2.6
-19.1
-12.7
0.5
3.3
31.9
-28.0
-10.5
11.7
6.8
-10.0
-16.1
8.5
-19.3
11.0
-15.5
13.7
-11.1
8.9
1.2
18.2
4.7
10.7
1.7
10.8
-7.6
19.8
Transport
Communications
Construction
Insurance
Financial services
IT services
Royalties and licence fees
0.6
14.1
-11.7
38.9
-4.4
5.1
-0.4
-13.2
Business services
-2.3
4.2
-7.6
5.4
-2.5
4.9
-7.2
1.8
Cultural and recreational services
-9.5
22.4
0.0
11.8
-12.3
11.2
-19.3
10.0
Government services
-4.7
-2.5
-12.6
10.3
-2.3
4.0
23.8
-15.4
SOURCES: Eurostat and Banco de España.
a In the case of the EU27, it includes services not allocated to a specijc heading.
3.3% share, larger than its share in world trade in goods (1.6%).12 In non-tourism services,
Spain’s share decreased slightly in 2010 (by 0.2 pp, to 2.6% in nominal terms), impacted
– like trade in goods – by a stronger US dollar.13
During the year there were no significant changes in the breakdown of non-tourism services
receipts and payments, with transport and other business services together continuing to
account for around 70% of the total in both cases. Transport services gained in relative terms
owing to the surge in trade in goods and the pick-up in international tourist flows, while
other business services lost ground. The fall in the royalties and business services deficits
made a significant contribution to the non-tourism services surplus due to the good results
in receipts vis-à-vis payments, offsetting the decline in the transport services heading, which
recorded a slightly negative balance as a result of the increase in the deficit associated with
trade in goods (i.e. freight services, in particular, for maritime transport) (see Table 2.7).
The breakdown by geographical area shows that the EU continued to be the main counterparty for Spain’s imports and exports of non-tourism services, accounting for around
two-thirds of the total (see Table 2.8). Transactions with the euro area amounted to 40% of
receipts and 44% of payments, while those with the United Kingdom amounted to some
19% of both receipts and payments. In the rest of the world, Switzerland and the United
States were the two main counterparties. In 2010, the non-tourism services surplus was
concentrated on Latin America (mainly Mexico, Brazil and Argentina) and Switzerland,
while there was a deficit vis-à-vis the euro area (Germany and France in particular) and
Asia (mainly China).
12
13
BANCO DE ESPAÑA
32
Spain’s high position in the services ranking reflects its weight as an international tourism destination.
The modest decline in Spain’s share of non-tourism services in 2010 was consistent with the pattern observed
for Germany and France (7.2% and 3.5%, 0.4 pp and 0.2 pp down on 2009, respectively), the euro area’s two
main exporters of other services, while compared with countries with a smaller share, such as Portugal and
Greece, its weight remained stable (0.5% and 0.9%, respectively).
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
OTHER SERVICES BALANCE: COMPONENTS
Year-on-year change in balances
CHART 2.7
2000- 2010
€bn
3
2
1
0
-1
-2
-3
2000
2001
2002
2003
2004
2005
2006
2007
CONSTRUCTION
COMPUTER AND INFORMATION
ROYALTIES AND LICENCE FEES
TRANSPORTATION
OTHER (a)
TOTAL
2008
2009
2010
OTHER BUSINESS SERVICES
SOURCE: Banco de España.
a Includes communication, insurance, jnancial, cultural and government services.
GEOGRAPHICAL BREAKDOWN OF OTHER SERVICES
TABLE 2.8
EXPORTS
PERCENTAGE OF
TOTAL
EU27
IMPORTS
PERCENTAGE OF
TOTAL
RATE OF CHANGE
EXTRA
EU27
EU27
EXTRA EU27
EU27
RATE OF CHANGE
EXTRA
EU27
EU27
EXTRA EU27
2010
2010
2009
2010
2009
2010
2010
2010
2009
2010
2009
2010
Other services
100.0
100.0
-12.0
8.1
-6.9
7.7
100.0
100.0
-13.2
3.8
-11.9
7.1
Transport
30.4
26.7
-20.0
12.9
-12.2
13.4
27.3
34.4
-23.0
12.5
-26.7
21.4
3.3
2.3
-4.3
4.5
10.1
6.2
3.0
5.3
-7.0
-15.6
-2.1
4.5
Communications
Construction
4.0
8.8
-20.9
15.4
-15.6
-2.6
2.4
3.4
-41.2
-7.8
51.4
-18.8
Insurance
1.4
2.1
21.7
-29.5
46.6
-26.3
2.3
3.5
11.3
-24.9
-1.6
21.9
Financial services
8.0
3.7
-18.0
8.3
-24.2
21.8
8.3
3.0
-11.7
12.3
-8.1
-6.8
IT services
4.9
15.5
54.8
-13.2
-16.2
29.1
5.2
1.7
-4.3
28.6
-19.0
-15.7
Royalties and licence fees
0.8
1.9
-19.8
1.4
2.7
91.1
3.8
3.5
-4.4
-9.7
8.6
-19.9
43.7
35.1
-11.4
9.6
0.4
-2.1
44.9
40.2
-7.3
1.1
-7.0
3.4
Cultural and recreational
services
2.1
3.1
-3.4
4.5
4.5
20.9
2.4
4.1
-19.4
-7.1
-19.2
39.8
Government services
1.4
0.9
-15.4
12.8
-4.9
4.0
0.4
0.9
-19.3
62.1
47.9
-39.1
Business services
SOURCE: Banco de España.
2.2.3
BALANCE OF INCOME
In 2010 the income balance deficit narrowed significantly by 27% to 2% of GDP, 0.8 pp
lower than in 2009. Developments in the income balance vis-à-vis the rest of the world
essentially reflect the behaviour of net investment income, as labour income continued to
be negligible. The lower investment income deficit is due to the improvement in the deficits
of monetary financial institutions (MFIs) and other resident sectors (ORSs) vis-à-vis the
rest of the world, which more than offset the increase in the general government deficit
and the fall in the Banco de España’s income surplus (see Chart 2.8).
BANCO DE ESPAÑA
33
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
INVESTMENT INCOME
CHART 2.8
PAYMENTS
RECEIPTS
€bn
€bn
100
100
80
80
60
60
40
40
20
20
0
0
00
01
02
03
04
05
BANCO DE ESPAÑA
GENERAL GOVERNMENT
TOTAL
06
07
08
09
00
10
01
MONETARY FINANCIAL INSTITUTIONS
OTHER RESIDENT SECTORS
BALANCE
02
03
04
05
06
BANCO DE ESPAÑA
GENERAL GOVERNMENT
TOTAL
07
08
09
10
MONETARY FINANCIAL INSTITUTIONS
OTHER RESIDENT SECTORS
BALANCE
€bn
% of GDP
10
1
0
0
-10
-1
-20
-2
-30
-3
-4
-40
00
01
02
03
04
BANCO DE ESPAÑA
GENERAL GOVERNMENT
TOTAL
05
06
07
08
09
10
MONETARY FINANCIAL INSTITUTIONS
OTHER RESIDENT SECTORS
00
01
02
03
04
05
TOTAL
MONETARY FINANCIAL INSTITUTIONS
OTHER RESIDENT SECTORS
06
07
08
09
10
BANCO DE ESPAÑA
GENERAL GOVERNMENT
SOURCE: Banco de España.
All investment types contributed to the correction in the 2010 income balance, particularly
net payments from financial instruments in the form of other investment (mainly loans,
deposits and repos), which fell by 36% (to €6,259 million), and the direct investment income surplus, which doubled in 2010 (to €7,090 million) (see Table 2.9). The decline in the
portfolio investment income deficit was smaller, as it narrowed by 4% to €22,467 million.
This favourable performance of investment income was due mainly to the strong rise in
dividend receipts from direct investment to record highs and to the decline in net interest
payments resulting from a sharper fall in payments, which was more marked than in receipts. The contraction in net interest payments came to a halt as the year wore on, owing
to the start of the upward movement in interest rates, especially in the case of long-term
debt, although, on average, rates remained at low levels throughout the year (particularly
short-term rates, which stood at record lows). Box 3.1 in Chapter 3 of this report describes
in greater detail the factors which contributed to the correction in the investment income
balance.
2.2.4
BALANCE OF CURRENT
The current transfers deficit narrowed by 12% in 2010, to €7,043 million, representing
TRANSFERS
0.7% of GDP, 0.1 pp lower than a year earlier. A moderate increase in receipts (1.6%) and
a fall in payments (–2.6%) both contributed to this correction. An analysis by institutional
sector reveals that this improvement was due to a reduction of the deficit on public sector
transfers, as the private sector surplus narrowed very slightly.
BANCO DE ESPAÑA
34
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
INVESTMENT INCOME BY INSTRUMENT
% of GDP
TABLE 2.9
AVERAGE 00-07
2008
2009
2010
3.6
4.7
3.8
3.8
Foreign direct investment
1.4
2.1
1.8
2.1
Portfolio investment
1.2
1.4
1.2
1.0
Other investment
1.0
1.3
0.8
0.6
RECEIPTS:
Total investment income
PAYMENTS:
Total investment income
5.4
8.0
6.7
5.8
1.4
1.4
1.5
1.5
Portfolio investment
2.2
3.9
3.4
3.1
Other investment
1.8
2.7
1.7
1.2
-1.8
-3.3
-2.8
-2.0
Foreign direct investment
BALANCES:
Total investment income
Foreign direct investment
0.0
0.7
0.3
0.7
Portfolio investment
-1.0
-2.5
-2.2
-2.1
Other investment
-0.8
-1.5
-0.9
-0.6
SOURCE: Banco de España.
The partial correction of the general government deficit reflects the narrowing of the deficit
on current transfers to and from the EU and, particularly, of the deficit on the other transfers heading.14 The improvement in the deficit on the other transfers heading reflected a
decline in payments associated with donations and, to a lesser extent, a rise in receipts
from taxes. There was a modest correction in the deficit on general government current
transfers linked to the EU notwithstanding the stronger contraction in receipts than in payments (38.3% and 5.6%, respectively) (see Table 2.10). The decline in receipts reflects the
fall in those from the European Social Fund (ESF), while the decline in payments is due to
the decrease in contributions to the EU under the VAT resource,15 the GNI (Gross National
Income) resource16 and other funds (the British rebate). The GNI resource is the key component of payments to the EU (representing more than 67% of the total). The latest information for 2011 seems to suggest this heading will remain fairly stable, in line with developments in the 2007-2013 Pluriannual Financial Framework contained in the State Budget
for 2011.17
The modest narrowing of the private sector surplus was essentially due to the decline in
EAGF-related receipts,18 while the deficit resulting from migrants’ remittances continued
its correction (–16%, although as a percentage of GDP it remained stable at around 0.2%).
14
15
16
17
18
BANCO DE ESPAÑA
35
This heading comprises receipts and payments relating to donations, taxes, Social Security, etc.
Since 1 January 2007, the rate of call of VAT is 0.3% of Member States’ capped VAT bases. Previously, in 2004,
the rate applied to the VAT base was reduced from 0.75% to 0.5%. Nevertheless, for the period 2007-13 low
VAT rates are forecast for Austria (0.23%), Germany (0.15%) and Sweden and the Netherlands (0.1%).
The total amount of the GNI resource is the difference between Community spending and other income. Its
amount is divided between the Member States in proportion to their respective GNI. For the period 2007-13,
the Netherlands and Sweden are expected to reduce their contributions under this resource, with the amounts
being financed by all Member States (including the Netherlands and Sweden) as a second tranche of their
contribution under the GNI resource.
There are no annual forecasts for the Pluriannual Financial Framework as a whole for EAGF-related receipts, as
these are budgeted annually and depend on the resolutions adopted under the CAP.
The regional rural development measures not included in the Objective 1 programmes that were previously part
of the EAGGF-Guarantee are included in the EAFRD. The Objective 1 regions are those whose GDP per capita
does not exceed 75% of the Community average, the thinly populated regions of Finland and Sweden and the
ultra-peripheral regions (the French overseas departments, the Canary Islands, the Azores and Madeira).
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
CURRENT AND CAPITAL TRANSFERS VIS-À-VIS THE EUROPEAN UNION (a)
€m
RECEIPTS
TABLE 2.10
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
11,150
12,013
15,567
16,510
16,290
14,498
12,125
12,556
11,337
11,645
12,302
6,619
7,135
8,423
8,094
8,543
7,985
7,533
7,959
6,425
7,679
6,900
797
1,085
1,795
1,653
1,774
1,784
1,251
1,691
720
989
526
48
53
79
79
68
100
137
100
144
95
142
5,775
5,997
6,550
6,362
6,702
6,101
6,145
—
—
—
—
—
—
—
—
—
—
—
6,167
5,561
6,596
6,231
4,530
4,877
7,144
8,417
7,746
6,513
4,593
4,598
4,912
3,965
5,402
2,819
3,381
4,046
5,344
4,712
3,851
2,214
2,761
2,713
2,485
2,425
514
628
978
1,274
1,127
1,270
1,095
1,023
482
62
198
Current transfers
Public:
ESF
Other
Private:
EAGGF (Guarantee)
EAGF
Capital transfers
Public:
ERDF
EAGGF (Guidance)
EAFRD
Cohesion Fund
PAYMENTS
Current transfers
—
—
—
—
—
—
—
—
977
618
858
1,197
869
2,120
1,799
1,907
1,391
1,283
813
741
801
1,920
6,660
6,777
6,967
8,193
8,416
10,295
10,674
10,314
10,634
11,440
10,801
6,660
6,777
6,967
8,193
8,416
10,295
10,674
10,314
10,634
11,440
10,801
Public:
Traditional own resources (b)
1,020
1,005
949
1,005
1,273
1,463
1,597
1,720
1,586
1,336
1,544
VAT resource
2,889
3,135
2,525
2,656
1,921
1,617
1,652
1,723
1,655
1,542
1,171
GNI resource
2,643
2,589
3,406
4,405
5,084
6,401
6,547
5,937
6,280
7,561
7,307
109
48
87
129
137
103
157
169
188
203
218
EDF
Other
BALANCE
—
—
—
—
—
713
722
765
924
798
560
4,490
5,236
8,600
8,317
7,874
4,202
1,451
2,242
703
205
1,500
SOURCES: Dirección General de Presupuestos (Secretaría de Estado de Hacienda) and Banco de España.
a As a result of the reform of the Common Agricultural Policy (CAP) in 2004 (Council Regulation (EC) No 1782/2003 and subsequent provisions), and pursuant to
Council Regulation (EC) No 1290/2005, two new European agricultural funds were created, the European Agricultural Guarantee Fund (EAGF) and the European
Agricultural Fund for Rural Development (EAFRD), replacing, to all effects and purposes, as from 16 October 2006, the two sections (Guarantee and Guidance)
of the former European Agricultural Guidance and Guarantee Fund (EAGGF). However, due to the settlement period of both funds, the EAGGF-Guarantee fund
continued to be received until 2006, while the EAGGF-Guidance fund was received until 2010 (although from 2009 most of the funds received relate to the
European Fisheries Fund).
b 25% (10% until 2002) of the amount of this item is not actually paid, since it is the amount that the Spanish State receives for administering the collection of
these funds. In the balance of payments, the gross payment is included in current transfers and the above mentioned 25% in government services receipts.
The increase in receipts and the small decline in payments (6.2% and 0.4%, respectively)
contributed to this correction.
The progressive moderation of net inflows of immigrants, which according to the latest
INE estimates19 is likely to have continued throughout 2010, combined with the rise in the
unemployment rate and the weak economic recovery, are the probable explanation for
the slack in payments, which, overall, declined less than in 2009.20 The geographical
breakdown of remittance payments reveals that Latin America countries are the main recipients of these payments, while the volume of remittances sent to China is increasing
(see Table 2.11).
19
20
BANCO DE ESPAÑA
36
See INE, Estimaciones de la Población Actual, April 2011.
The latest World Bank estimates suggest that remittance transactions worldwide rose by 5.8% in 2010, with
those to developing countries showing greater momentum. See World Bank (2010), Remittances to Developing
Countries Resilient in the Recent Crisis, November 2010, press release 2011/1 68/DEC.
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010
GEOGRAPHICAL BREAKDOWN OF REMITTANCE PAYMENTS IN 2009 AND 2010 (a)
Main countries of destination. Percentage of total
TABLE 2.11
2009
2010
Colombia
18.2
17.9
Ecuador
13.5
12.8
Bolivia
9.3
8.5
Romania
5.1
5.3
Paraguay
4.2
4.5
Morocco
4.2
4.1
Dominican Republic
4.1
4.0
Peru
3.6
3.6
Brazil
3.5
3.5
China
0.7
3.5
Pakistan
1.7
1.7
Senegal
1.8
1.5
SOURCE: Banco de España.
a The geographical breakdown is obtained from the information provided to the Banco de España by currency-exchange
bureaux.
2.3 The capital account
balance
The surplus on the capital account, which largely depends on capital transfers to and from
the EU, increased by 51% in 2010 to €6,461 million, as receipts rose and payments fell (by
24% and –28%, respectively). As a percentage of GDP, the surplus widened by 0.2 pp to
0.6%. By sector, the increase in the capital account surplus essentially reflects the performance of the general government balance. The contribution from the purchase and sale of
non-produced non-financial assets declined.21
The increase in the general government surplus centred largely on transfers from the EU,
which rose by 36%, owing mainly to the Cohesion Funds (which, together with the EDRF,
aim to reduce regional imbalances within the EU and are endowed with the highest volume
of funds), which more than doubled those received in 2009. The positive contribution from
agricultural funds (grouped in the EAGGF-Guidance and the EAFRD) was much smaller. As
stated in the State Budget for 2011, last year’s growth in the Cohesion Funds was mainly
due to the fact that most of the funds for the current programme period 2007-2013 were
received in 2010. The forecasts for 2011 stemming from the 2007-2013 Pluriannual Financial Framework therefore point to a decline in capital transfers from the EU, specifically
those made via the Cohesion Funds, in line with the information available at the start of this
year. Lastly, the private sector capital transfers surplus improved slightly.
21
BANCO DE ESPAÑA
37
This heading comprises the acquisition/disposal of non-produced tangible assets (land and subsoil resources)
and the acquisition/disposal of non-produced intangible assets (patents, copyright, trademarks, licences, etc.,
and leases and other transferable contracts).
THE SPANISH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION, 2010