Spain's Trade Deficit Soars 53% to €29 Billion as Imports Outpace Exports

Spain's Trade Deficit Surges in the First Seven Months of 2025

Spain's trade deficit has significantly widened in the first seven months of 2025, increasing by 53% compared to the same period in 2024. This means that the country imported considerably more goods than it exported, resulting in a negative balance of €29.122 billion between January and July, according to data released by the Ministry of Economy, Commerce, and Business.

Understanding the Trade Imbalance

The widening trade deficit reflects a persistent trend in Spain's international merchandise trade, where import needs, particularly for fuel and high value-added goods, outweigh exports. Between January and July, import growth nearly quadrupled export growth. Imports totaled over €260 billion, a 5.4% increase from 2024, while exports reached €231 billion, a more modest 1.4% rise. This marks the largest deficit for the first seven months of the year since 2022.

Key Drivers: Imports and Exports

The acceleration in imports was primarily driven by increased purchases of capital goods and chemical products, with Europe accounting for over 56% of these imports. On the export side, food products and capital goods constituted the bulk of exports, with the Eurozone absorbing 61% of Spain's foreign-bound production.

Trade Relations with Key Partners

France remains the primary destination for Spanish exports, accounting for 14.5% of the total. Germany follows at 10.2%. Outside of Europe, the United States is a major market, although flows have decreased by almost 6% until July, representing only 4.4% of total exports. However, imports from the U.S. have grown by 11.6% to €18.536 billion, creating a trade deficit of approximately €8.2 billion, compared to €5.6 billion in the same period last year.

The Impact of the U.S. Trade Landscape

Despite escalating trade tensions, Spain's relatively low export dependence on the U.S. (4-5%) has provided some buffer against protectionist measures. However, ongoing negotiations between Washington and Brussels, and the vulnerability of sectors heavily reliant on U.S. exports, remain critical factors. The unpredictability of the U.S. trade policy adds further complexity.

Foreign Direct Investment (IED) Decline

Data on foreign direct investment (IED) into Spain indicates a sharp decrease in the first half of the year. Flows have contracted by 60%, from approximately €21 billion last year to about €8.5 billion this year. The Ministry of Economy attributes this decline to a general decrease in foreign direct investment internationally, stemming from global uncertainty and geopolitical tensions. Organizations like Unctad and the OECD have highlighted a similar trend, predicting a challenging year for global investment flows.

Factors Influencing IED

The decrease can also be attributed to large one-off transactions that inflated the 2024 figures and reduced investment from significant sources such as the United Kingdom and the United States. Despite this, investment in new projects continues to grow, with Spain ranking as the fourth-largest recipient of foreign investment for establishing new facilities between 2014 and 2024, particularly in the renewable energy sector.