The year 2022 was marked by explosive and record growth in Portuguese international trade in goods, driven by rising prices (an unprecedented spike in inflation in recent history in Europe and beyond), reports the National Institute of Statistics (INE), which released data yesterday disclosed prior to last year’s close.
But all in all, Portugal’s trade deficit in goods is now at a record high and its weight relative to gross domestic product (GDP) in 2022 was the highest since the time of the PS government of José Sócrates, calculations show. Dinheiro I live based on the above updated statistics from INE.
To calculate this weight, the European Commission’s most recent nominal GDP estimate for the past year has been used.
Detailed official GDP figures for 2022 will be released by INE on the 28th.
The largest deficit since the debt crisis
But for now it is possible to assess with high probability that the trade deficit ratio ended last year at a value equal to 13% of annual GDP.
It is necessary to go back to 2008 to discover a greater degree of external dependence. 14 years ago, two and a half years before the bankruptcy, that same trade deficit was 14.2% of the country’s internal wealth.
Portugal’s trade dependence means that exports, even if they increase significantly in value, are not enough to cover imports.
And that the force of imported inflation is very high, either because of energy prices, but also because other goods are also purchased at a very high cost, which has never been seen before in the recent history of the Portuguese economy.
In 2022, goods exports increased by more than 23% last year, the highest value ever recorded.
Imports also broke the record for the INE series, jumping 31%. This is on top of the 22% increase registered in 2021.
The difference (deficit) between international sales and purchases amounts to 30.8 billion euros (2022 values).
INE says that for all of 2022, as stated, “exports and imports have increased by 23.1% and 31.2% respectively (+18.3% and +22.0% in 2021, for the same order), with the trade deficit increased by 11,256. billion euros to 30.783 billion euros”.
Even excluding the share of fuels and lubricants, exports and imports grew remarkably fast: “19.6% and 23.2% respectively in 2022 (+16.9% and +18.6% in 2021, for the same order)”, explains INE.
For example, the trade deficit excluding that part of energy amounted to “19.205 billion euros, an increase of 5.386 billion euros compared to 2021”.
product by product
A quick search of the main product lists shows that Portuguese exports of fuels and lubricants, one of Portugal’s largest export sectors, grew by more than 83% in 2022, driven by escalating inflation (from oil and gas prices).
But Portugal here reaffirms its dependence and high exposure to this inflationary problem.
The cost of what the country needed to import energy nearly doubled last year, rising by more than 95%.
Still with regard to exports, the INE data shows significant increases in value in food segments, such as “fats, animal oils, vegetables”. The value sold was more than 40% compared to 2021.
The double “pulp and paper” registered a similar progress, more than 38%.
At the other end of the scale, there are overwhelming increases in the import costs of vegetables (30% more expensive than in 2021), hides and leather (46% more), wood and charcoal (35% more), footwear (almost 40% more in these imports and thus in a sector in which Portugal is competitive and world leader).
Also notable is the higher bill for “transport material”, with the import value rising by 30%.
Recently, the Bank of Portugal analyzed these foreign trade dynamics and its latest economic bulletin concludes as a warning that “the current situation largely reflects a loss of terms of trade [os preços das exportações não compensam os das exportações] in 2021-2022, which in the Portuguese case and, in cumulative terms, is on an unprecedented scale in the last two decades”.
“This evolution translates into a loss of real income for the economy that must be shared by all actors” so it is necessary “to ensure that wage increases and business margins do not create continued inflationary pressures, with negative consequences for competitiveness and the macro economic stability,” says the central bank headed by Mário Centeno.
Luís Reis Ribeiro is a journalist for Dinheiro Vivo
Source: DN
