Spain’s trade deficit fell by 22.5 per cent in 2016

Ashley Coates
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Spain has reported its second lowest trade deficit since 1997 (Source: Getty)

Exports from Europe’s fifth largest economy rose to their highest level on record, while the trade deficit fell to its second lowest level since 1997, according to Spain’s economy ministry.

It left the economy with a trade deficit of €18.8 billion euros (£16bn) for 2016, while the value of exports reached €254.5bn, an increase of 1.7 per cent over the year. Imports fell by 0.4 per cent, down to €273.3bn.

Spain’s economy grew faster than the UK’s in 2016, reaching 3.2 per cent according to the National Statistics Institute’s preliminary estimates.

Read more: Spain wants to start post-Brexit trade talks with Britain soon

Despite the positive data, overall unemployment in Spain remains at 18 per cent, the result of a deep recession that saw its economy contract by 2.9 per cent in 2012. Unemployment among young people grew in 2016, reaching 44.4 per cent, a legacy of the eurozone debt crisis which hit Spain particularly hard.

The Bank of Spain says it expects growth slowing to 2.5 per cent in 2017, as imbalances in the Spanish labour market and a reliance on energy imports start to drag on performance.

December saw exports rising by 2.9 per cent compared to December 2015, reaching €20.7bn. Imports also rose, by 5.6 per cent to €23.2bn.

Read more: Less pain in Spain: Unemployment falls to lowest since 2009

Since losing a parliamentary majority, Spanish Prime Minister Mariano Rajoy is struggling to get approval for his 2017 budget, which will require cross-party support. Budget minister Cristobal Montoro says he will present the new budget once a full consensus is achieved, to avoid it being voted down in parliament.

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