Bad news for Spain. The arrival of the recession to Germany -its economy has decreased for two consecutive quarters, as it has announced this Thursday- puts at stake something more than 37,000 million euros in Spanish exports to this country, right in the middle of the collapse in Spain of domestic consumption. Las exports have become the engine of the Spanish economy, and the entry into recession in Germany could upset the forecasts of the Government of Pedro Sanchez.
To this we must add that the first important voices have already appeared -the Federal Reserve- that predict that the United States will also enter a recession starting in the fourth quarter of this year, where in 2022 Spanish companies exported another 19,000 million of euros. Exports and public investment -European funds- are the key to why the Spanish economy is currently growing more than the rest of the large European economies -although it is the last to recover GDP prior to the pandemic-.
A drop in exports due to the drop in economic activity in Germany would therefore be a strong blow to the national economy. The German country is the second recipient of Spanish products -automobile in first place, a key industry for Spain- after France and, according to data from Commerce, in 2022 they exceeded 37,000 million. More than 60,000 million are exported to France.
In addition, according to data from the CEOE, there are some 1,800 German companies working in Spain that employ 700,000 direct and indirect people. The recession in Germany may also affect another key sector for Spain, tourism. Almost half a million Germans visit the country every month and a worsening of its economy will affect Spain. In 2022, according to data from the Ministry of Industry, German tourists left in Spain more than 11,500 million of euros.
First trimester
The good news is that, in the first quarter, the economic problems of Germany have not yet been noticed in Spain. In the first three months of the year the visit of German tourists continues to rise and exports, too. According to data from Commerce, sales to this country have increased by 14.3% and to the whole of the European Union, by 15.4%. These are data that have allowed the national GDP to grow by 0.5% in the first quarter despite the collapse in domestic consumption.
A collapse that continues in this second quarter and that, if exports and tourism are also combined due to the German contagion, they will have an impact on the national economy. The Government expects GDP to grow by 2.1% this year and to recover the wealth prior to the pandemic.
