Exports of goods plummet 15% in February as recession fears loom

In February, both Portuguese exports of goods and imports fell. The drop in sales was more significant, contributing to a worsening of the trade deficit in goods. According to the INE (National Institute of Statistics), the running deficit increased to €2.5Bn.

Portugal exported a total of €6.174Bn in goods, a figure that compares with €7.253Bn recorded in the same period last year. The drop is justified by decreases in exports to Germany (-42.1%), Spain (-9.2%) and the United States (-34.4%).

In the case of Germany and the United States, the reduction is mainly associated with a decrease in sales of industrial supplies, particularly chemical products. As for Spain, there was a reduction in sales, mainly of fuels and transport equipment.

On the import side, there was a year-on-year decrease of 6.3% in February. Portugal purchased a total of €8.72 billion worth of goods from abroad, compared to €9.31 billion in the previous year. Similar to January, this decrease was explained by the “sharp decline” in imports from Ireland (-68.7%), the country’s eighth-largest supplier. There was also a decrease in imports from the United States (-37.8%), “essentially resulting from the reduction in fuel and lubricant transactions.”

Since the drop in exports was more significant than that in imports, the trade deficit in goods worsened to €2,546 million. This represents an increase of €489 million compared to February of the previous year.

Transactions without transfer of ownership (i.e., those related to or following commissioned work for the processing or transformation of goods belonging to other countries) had a positive effect on both exports and imports. Excluding this type of transaction, “the decrease was less pronounced in both flows” in February: the rate of change in exports was -6.5% and in imports was -4.2%.

Excluding transactions without transfer of ownership, the trade deficit increased significantly less than when considering all trade. It rose by €38 million, totalling €2,610 million.

Source: Negócios; Image: Paul Teysen, Unsplash.