Foreign trade accounts for a significant part of Spanish GDP. A widening current account deficit reveals foreign markets are shrinking for the Spanish. That shrinking can arise from weaker foreign markets or from products not being bought at the same rates as before owing to buyers switching preferences to better made products sourced elsewhere.
The Economy Ministry reports that exports growth slowed to a paltry 0.5% year over year.
The Spanish mostly export cars (8.8%), refined petroleum (6.3%), packaged medicaments (3.7%), vehicle parts (3.5%), and delivery trucks (1.9%) mostly to the French (15%), Germans (10%), Italians (7.7%), Portuguese (7.1%), and the British (6.2%).
If a people run a current account deficit, they're living on credit. They have become borrowers from the rest of the world.
So who is giving credit and who is getting that credit? Likely, successive Spanish parliamentarians have issued sovereign bonds, borrowing from suckers who then pay for the six million unemployed Spaniards to buy things with welfare payouts.
A current account deficit represents negative net sales abroad. The current account stands as an indicator about the state of an economy. The current account consists of mostly of net exports (exports less imports) added with the smaller components of foreign net income (earnings from foreign direct investment less earnings paid to foreigners on domestic investments) and net current transfers (welfare outflows less inflows).
When people find themselves in annual current account deficits mostly driven by net exports, FDI investors become wary. If a people cannot cover current debt with future revenue, those people can become insolvent.
The Spanish have the 13th largest economy among the world. Spain could be the canary in the coal mine for Europe.
If a people run a current account deficit, they're living on credit. They have become borrowers from the rest of the world.
So who is giving credit and who is getting that credit? Likely, successive Spanish parliamentarians have issued sovereign bonds, borrowing from suckers who then pay for the six million unemployed Spaniards to buy things with welfare payouts.
A current account deficit represents negative net sales abroad. The current account stands as an indicator about the state of an economy. The current account consists of mostly of net exports (exports less imports) added with the smaller components of foreign net income (earnings from foreign direct investment less earnings paid to foreigners on domestic investments) and net current transfers (welfare outflows less inflows).
When people find themselves in annual current account deficits mostly driven by net exports, FDI investors become wary. If a people cannot cover current debt with future revenue, those people can become insolvent.
The Spanish have the 13th largest economy among the world. Spain could be the canary in the coal mine for Europe.
Gab It
