According to the Competitiveness Trend Index (Spanish acronym: ITC), calculated using the Consumer Price Index (CPI), the price competitiveness of the Spanish economy improved in the second quarter of 2020 vis-à-vis the EU-27 and the Organization for Economic Co-operation and Development (OECD).
Reductions in this index show gains in competitiveness, fell by 0.6% compared with the prolonged upward trend in the first quarter of 2020. The gain in competitiveness is due to the fall in the price index, which was bigger than the appreciation of the euro against the currencies of those EU countries that do not form part of the Eurozone.
Compared with the OECD countries, the ITC fell by 0.2% due to a more moderate increase in prices in Spain than in the OECD, and despite the appreciation of the euro against the main OECD currencies.
The ITC rose against the BRICS countries by a year-on-year 1.9% in the second quarter. The loss of competitiveness against these countries was due to the appreciation of the exchange rate, while the relative price index fell by 3.4%.
The latest ITC data calculated using other price or cost indices refer to the first quarter of 2020 and confirm the losses in competitiveness.
The average ITC calculated using Unit Value Indices (UVIs) worsened against the EU-27 as a whole (down 0.9%), mainly due to the increase in the index of relative prices.
Compared with the OECD countries, the ITC also lost in competitiveness (down 1.7%), also due to a rise in relative prices. The ITC calculated using Unit Labour Costs (ULCs) against the EU-27 rose by 3.5% in the first quarter of 2020. The reason for this was the behaviour of the Unit Labour Cost indices, which rose by 3.3%, together with exchange-rate index, which rose by 0.2%.