The British tourism in Spain has endured so far uncertainty of Brexit. However, same has not happened with sale of goods. The growth of Spanish exports to United Kingdom was interrupted in 2017 after five years of progress, says an analysis of Bank of Spain published this Thursday.
In a context of depreciation of pound against euro provoked by departure of London from EU, sales of goods from Spain to United Kingdom fell 6% last year. This behaviour is in contrast to 8% increase in exports to whole of European Union in that same year. That is to say, according to document of Bank of Spain, Brexit has already affected Spanish foreign trade.
In 2017 also halted expansion of Spanish exporting companies to UK, whose number fell 0.8% in both SMEs and large. "This reduction has been greater than that observed for or destinations," underlines study.
Of total Spanish companies exporting goods, which sell to United Kingdom represent 7%, according to data of Icex. Between 2012 and 2017, number of companies increased by 8% to 11,695, of which a quarter would only sell to British Isles. The latter would be in principle " most vulnerable", explains study service of bank directed by Luis Linde. This fragility would be even greater in so far as those companies that only exchange with United Kingdom do so because y are products that are difficult to replace.
Although 85% of companies that trade with United Kingdom are SMEs, most of sales are largest companies. In short, "These companies are, on average, bigger, more productive and geographically diversified than those that export to main countries of monetary union", points out Bank of Spain. Which in your opinion could help limit impact. By sector, agro-food and automotive industry accumulate about half of exports. Moreover, much of detected sales slump was concentrated in automobile.Economic slowdown
The United Kingdom is Spain's fifth trading partner by absorbing about 7% of Spanish goods sales abroad. On contrary, purchases from Spain to United Kingdom only comprise 4% of total British merchandise exports. After Brexit and supported by a buoyant global market, exports of goods and services have gone from subtracting 0.8 points of UK GDP to add 0.6 points last year. And this has been largely due to depreciation of pound. The Bank of Spain recalls that in 2017 price declined by 7% on average yearly against euro.
But, according to European Commission's spring forecast, British economy is suffering a slowdown to a rate of 1.5% increase in GDP this year. The growth of private consumption will be modest, owing to a rise in wages below inflation and to situation of saving rate, in historical lows. Moreover, investment will remain weak as long as uncertainty persists, says community executive.
With regard to medium and long term, " final effect of this process on Spanish companies with a presence in United Kingdom or with possibility of possibly accessing that market will be given, to a large extent, by terms that are finally established around Model of trade relations between this country and European Union, "says Bank of Spain. In such a scenario of "high uncertainty" it is possible since most of existing trade links are preserved today, until London-EU relations are governed by rules of World Trade Organization, warns Supervisory body.The tourism
On or hand, Brexit could also harm tourism, as British make up 23% of tourists visiting Spain and 21% of revenues in sector. At moment, arrival of British continues to grow, although it has done at a lower rate than in 2016, when it advanced at double-digit rates. According to a recent report by UBS on Spanish tourism industry, partly re is a certain deviation from British visitors back to Turkey, Egypt and Tunisia, to detriment of Spain and Portugal.
Although at moment impact of Brexit on Spanish tourism has not been "discernible", "could have a greater negative effects if slowdown is prolonged, reducing purchasing capacity of British and translating into a combination of less Visitors, fewer overnight stays and less daily spending, "says UBS ' role.