Despite the fact that Spain’s commercial and financial exposure is much less dependent on Russia and Ukraine than that of other countries in the community environment, the negative effects of the sanctions imposed by the West on Moscow will have an impact above all on those sectors that are more open to the economy world. The increase in the cost of transport will be especially negative in industry and tourism, and it will also be negative for the agri-food and construction sectors, which could subtract almost two points from the Spanish gross domestic product (GDP) in 2022 and 1.7 points that of 2023. This is confirmed by the report published this Wednesday by BBVA Research, which explores the consequences that the war in Ukraine will have on the Spanish economy, and which indicates that the north of the country, with Asturias, Navarra, Cantabria, Galicia and the Basque Country, in that order, will be the most vulnerable area due to the higher intensity of energy use in its GDP.
The sectors that will be most affected are energy and food. During the period from 2014 to 2021, a fifth of the coal imported by Spain came from Russia, as well as 8% of oil and derivatives. In that same period, 20% of cereals and 10% of fats and oils came from Ukraine, the report reveals. The increase in the prices of these raw materials, with the horizon drawn by the European Union of reducing Russian energy imports by two thirds, and the scarcity of others such as palladium, potash or neon gas, where Russia and Ukraine have a high market share, they will be the most important blows to the Spanish economy.
In 2019, the two largest sources of energy used by the Spanish industry were natural gas (41%) and electricity (32%), says the report. The chemical, non-metallic mineral, and food, beverage, and tobacco industries are among the most exposed to natural gas. To electricity, they are that of the steel industry, along with chemistry and food.
BBVA Research indicates that during the 2014-2021 period nominal imports of goods from Russia barely represented 1.3% of the total; from Ukraine 0.4%. In the case of exports of goods, the figures are reduced by half. However, the tourism sector itself may suffer. Although the spending of Russian visitors did not reach 2.1% of the total between 2016 and 2019, the losses are greater for certain regions because Russian tourists are the ones who spend the most: an average of 1,516 euros, one of the highest figures within the European area. Catalonia thus accounted for just over 50% of the total Russian travelers, followed by the Balearic Islands (11%), Andalusia (10%) and Madrid (8%) and the Valencian Community (7%).
Sales of textiles and certain durable consumer goods will also suffer the blows of the explosion of the conflict. Catalonia, the Basque Country, the Valencian Community, Galicia, Murcia, Andalusia and Madrid stand out in the trade of goods with Russia and Ukraine. Between 2014 and 2021, 12.1% of all exported seeds and oilseeds, 2.6% of all other durable consumer goods, and 2.1% of textiles were sold to Russia. Ukraine exported 6.6% of the total oil seeds and fruits and 3.1% of the total coal, although the weight of these products is negligible in the total sales of food and energy (0. 4% and 1,% respectively).
Nor will there be much instability in the real estate sector. The purchase of homes in Spain by Russians and Ukrainians represents less than 5% of those made by all foreigners in the last seven years.
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The report concludes that the increase in uncertainty, reflected in the volatility of the financial markets, could lead to a fall in confidence that would affect investment and consumption. The Eurostoxx 50, a stock index that represents the 50 largest companies in the euro zone in terms of capitalization, ended March 9% below its level at the beginning of the year, a figure that will probably have affected the wealth of Spanish families and their consumption expectations.