Portugal to record 5th largest EU trade deficit in 2022

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In 2022, Portugal recorded the fifth-largest trade deficit among European Union countries and the sixth-largest deficit as a percentage of GDP, at 31,036 million euros and 13.0% respectively, INE revealed today.

According to an analysis by the National Statistics Institute (INE) of Portugal’s international merchandise trade in the context of the European Union and the Eurozone, France was the member state with the largest trade deficit, while Germany recorded the largest surplus.

Malta, Cyprus and Croatia recorded the highest deficit as a percentage of gross domestic product (GDP), while Ireland recorded the highest surplus as a percentage of GDP, followed by the Netherlands and Germany.

INE data also showed that in 2022, Portugal’s largest trade deficits continued to be recorded in goods transactions with Spain, China and Germany, although there was an exchange of positions between these two countries.

The largest surplus remained in trade with France, while the second and third largest surpluses were in trade with the United Kingdom and the United States, respectively.

Last year, INE points out that Portuguese merchandise exports reached the “highest total value ever recorded in international trade statistics”, amounting to 78,207 million euros and increasing by 22.9% y-o-y and 30.6% y-o-y in 2019, following an 18.3% y-o-y increase in 2021.

This growth in Portuguese exports in 2022, compared with 2021, exceeded the growth in exports of all European Union countries (which was 21.0%) by 1.9 percentage points, although compared with 2019 national exports grew slightly less (-0.1 percentage points).

Compared to the growth of Eurozone countries as a whole, INE notes that Portuguese exports “showed greater dynamism” (+1.8 percentage points compared to 2021 and +0.7 percentage points compared to 2019).

As for domestic imports of goods, they reached 109,243 million euros in 2022, also “the highest value ever recorded in international trade statistics”, having risen by 31.4% year-on-year (in 2021 they had risen by 22.0%) and increased by 36.6% compared with 2019.

Compared to total imports from the European Union, which grew by 28.9% year-on-year and 43.4% year-on-year in 2019, Portuguese imports recorded “slightly higher” annual growth (+2.5 percentage points) in 2022, but lower than in 2019 (-6.8 percentage points).

Compared with growth in all eurozone countries, Portuguese imports grew more in 2021 (+1.8 percentage points), but less than in 2019 (-6.4 percentage points).

In 2022, imports from intra-EU countries increased by 23.9% on 2021 (+14,641 million euros), while imports from extra-EU countries rose by 52.3% (+11,456 million euros). By 2021, they had risen by 20.3% and 27.0% respectively.

Portuguese imports from the group of countries belonging to the Eurozone rose by 24.3% (+20.2% in 2021), with imports from other EU countries also increasing (+19.0%, +21.7% in 2021).

China remained Portugal’s main extra-EU supplier, becoming its fourth main partner country (sixth in 2021), with a weighting of 5.1% (+0.3 percentage points on 2021).

Compared to the previous year, in the ranking of the top 10 countries supplying goods to Portugal, the Netherlands and Italy have moved up to fifth and sixth place respectively (fourth and fifth, in the same order, in 2021).

Belgium, which was in seventh place in 2021, has been overtaken by Brazil and the USA (eighth and ninth respectively in 2021), and now occupies ninth position in the ranking. Poland has ceased to be the tenth main supplier (eleventh in 2022), swapping positions with Nigeria.

Also according to INE, over the past decade, Portugal’s exports have diverged on average by +0.7 percentage points compared to all European Union countries, and by +0.9 percentage points compared to Eurozone countries.

“The biggest difference was recorded in 2013, with Portuguese exports growing by 4.6%, compared with +0.3% in the European Union and +0.1% in all eurozone countries”, he points out.

In 2020, the year in which the pandemic began, the decline in Portuguese exports accelerated, reaching -10.3%, compared with -8.0% in the European Union and -8.8% in the euro zone.

Over the past decade, imports from Portugal have diverged by an average of +1.1 percentage points compared to the European Union as a whole, and +1.4 percentage points compared to euro zone countries.

According to the INE, “the biggest difference coincided with the period when the effects of the covid-19 pandemic were felt most acutely, with Portuguese imports falling by 14.8% in 2020, compared with -8.9% in the European Union as a whole and -9.7% in euro zone countries”.

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