The olive oil effect
Its banks are a mess and unemployment is rampant. So why are officials from Spain’s economic ministry all smiles?
Thanks to record-setting exports and a fall in imports, Spain chopped its trade deficit in half last year, according to data published by the ministry (link in Spanish). Overall, exports grew by 5.2% in 2013, one of the better performances from a large European economy. (The UK managed only 1% export growth, Germany and Italy saw exports stagnate, and France saw sales slide by 1.6%.)
This is important, because as long as Spain’s local economy remains in the doldrums, one of its best hopes for boosting growth comes from selling goods, like its vast reserves of olive oil, to healthier economies abroad. For example, the surprisingly strong UK economy sucked in 14% more Spanish exports last year than the year before, which nearly doubled Spain’s trade surplus with Britain. Exports to fast-growing emerging markets in Africa, the Middle East, and Latin America also rose smartly.