Spain increases its exports as Goldman Sachs admit they got it wrong

A resurgent car manufacturing industry has steered Spain's exports into the fast lane

Fuelled by foreign trade and a soaring export market, Spain has clawed its way out of its two-year recession, confounding global economists who had earlier predicted the country would be mired in contraction for years to come.

In September, exports rose by an impressive 8.3 per cent year-on-year, according to data released by the Economy Ministry, with foreign shipments of goods increasing by 4.4 per cent in the third quarter of 2013…

The most encouraging aspect of this news, however, were the import figures, which showed a 4.7 per cent increase compared to last year, adding credence to recent reports that more and more Spaniards are increasing their own purchasing power once again.

“The rise in Spanish exports to emerging economies is particularly striking,” said Deputy Trade Minister Jaime García-Legaz Ponce during a Madrid news conference. “Spanish exports have been boosted by Spain’s gains in competitiveness and an increase in the number of exporting companies.”

Next year, the government is pinning even further hope on Spain’s newly competitive export industry, with Mariano Rajoy – the Spanish Prime Minister – hopeful that foreign sales can generate at least 0.7 per cent growth, which would be enough to counter the proposed austerity measures yet to be implemented.

Meanwhile, investment bank Goldman Sachs has admitted that it called Spain’s financial situation incorrectly, erroneously stating that the country would perform extremely weakly in 2013.

Recent good news stories for the Spanish economy have confounded these predictions and forced the global bank into something of a climbdown.
In its November 14th report, Goldman Sachs wrote: “Relative to our original outlook, growth performance in Spain has exceeded our weak expectations.

“Spanish commitment to reforms has impressed, and we begin to see some of the fruits of that effort in terms of more efficient adjustment,” adding that the government’s controversial labour reforms had indeed had the desired effect, helping to kickstart an economic recovery and instil confidence in Spanish companies and workers.