October’s Business Environment – Business Brief highlights the clear performance of goods and services in terms of international trade performance.
Portuguese merchandise exports are growing at a higher-than-expected nominal rate between January and September (annual growth rate, tvh, 25.6%, even more than the 18.3% recovery recorded for 2021 as a whole ; INE data and AEP calculations), given the difficult military situation in Europe.
If, in terms of the balance of trade, the war in Europe has benefited services (through tourism) and hurt goods, the effect may start to wane in 2023 if the economic downturn abroad reduces the influx of tourists to Portugal and/or the average cost per tourist to a complete reversal, when the desired end of the war comes, which, unfortunately, is no longer foreseen.
The contribution to this progression varies in terms of products (and related sectors), with a focus on fuels and mineral oils (84.7% hvr, contributing 5.1 percentage points, pp, to 25.6% of world exports). , Wood, cork, pulp and paper (33.8% and 2.5 p.p.), Chemical industry (41.4% and 2.5 p.p.), Metals (26.4% and 2.4 p.p.), machinery and equipment (15.9% and 2.3 p.p.), vegetable products and fats (31.4% and 2.1 p.p.), transport materials (13.7% and 1.8 p.p.) and plastics and rubber (20.2% and 1.6 p.p.), while only contributions above 1 p.p. are taken into account. product groups.
However, we should not forget that the import of goods in nominal terms increased even more (36.7% tvh compared to September, with a contribution of 13.5 percentage points from the Fuel and Oil Products group, where tvh amounted to 123.6%), ahead of a significant deterioration in the balance of trade in goods (deterioration of the deficit by 9.8 billion euros, million euros, to 22.6 thousand in 2021 as a whole).
According to the latest data from the Bank of Portugal, exports of services show even more nominal growth than goods (79% tvh between January and August), with travel and tourism (155.6%) being the dominant contributor. considering also its prevailing weight and higher dynamics than other rubrics, which have benefited from the image of Portugal as a safe destination, far from the place of war. However, in the case of services, imports have a lower value than exports, and growth was much lower (41.8% before August), which means that the surplus in the balance of services is increasing, which is contrary to the unfavorable evolution of goods.
It should also be noted that the dynamics of exports is noticeable even in real terms (at constant prices), without taking into account the impact of inflation, taking into account the most recent national accounts data, up to the 2nd quarter. World exports in volume terms increased by 18.6% year on year in the 1st half of the year as a whole, with variations of 10.2% for goods and 41.0% for services.
Envolvente Empresarial – Síntese de Conjuntura is a monthly publication with key data and indicators of economic activity developed jointly by AEP, AIP and CIP. It includes two reissues of the indicators, one for Portugal and one for the Eurozone.
