Spain Gains Price Competitiveness Versus Eurozone And OECD Countries


In the third quarter of 2016, the Spanish economy posted an increase in price competitiveness versus OECD countries and the Eurozone. Spain gained competitiveness over OECD countries after two quarters in which it had either worsened or remained stable.

Versus Eurozone countries (EMU-19), the CTI has improved in comparison with the Eurozone for the last thirteen quarters in a row.

In the third quarter there was a loss of price competitiveness versus the European Union as a whole, taking Consumer Price Indices as a reference. This result – which signals the end of an unbroken trend of competitiveness gain over this area lasting eleven quarters – was caused by the appreciation of the euro versus the currencies of other EU countries, eased by the downward trend of Spanish prices contrasting with the upward trend of prices seen in the other countries.

With regard to BRIC countries, the CTI measured by CPIs posted a loss of competitiveness due to exchange rates. The appreciation of the euro against the currencies of these countries was partly offset by the drop in the relative price index.

If considering the CTI measured by Export Unit Value Indices, the second quarter of the year saw a drop of competitiveness versus the EU, mainly due to the appreciation of the euro versus other member country currencies.

With regard to OECD countries, in the second quarter of 2016 there was also a loss of competitiveness measured by UVIs, in this case due to the combined effect of an increase of the exchange rate index and the greater drop (on average) of OECD country export prices compared to the drop posted in Spain.

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