The Effect of COVID-19 on International Trade: the Case of Spain

Revista de Estudios Andaluces (REA) | Núm. 44, julio (2022) | e-ISSN: 2340-2776 https://dx.doi.org/10.12795/rea.2022.i44 | © Editorial Universidad de Sevilla 2022 https://editorial.us.es/es/revistas/revista-de-estudios-andaluces https://revistascientificas.us.es/index.php/REA CC BY-NC-ND 32 32 https://dx.doi.org/10.12795/rea.2022.i44.02 The effect of COVID-19 on international trade: the case of Spain El efecto del COVID-19 en el comercio internacional: el caso de España Fernando González-Ferriz [email protected] 0000-0002-2007-4862 Universidad Isabel I. Calle de Fernán González, 76. 09003 Burgos, España INFO ARTÍCULO ABSTRACT Received: 03/03/2022 Revised: 20/05/2022 Accepted: 25/05/2022 KEYWORDS Economics Internationalization Exports Balance of Payments COVID-19 International Trade, as part of the global economy, has suffered the consequences of the crisis originated by the pandemic. This paper pretends to analyze the effects on the exports and imports of products and services in Spain. The conclusions show that, the drastic falls in some sectors had a temporary component in most cases (especially sanitary and esential goods), but other industries (like tourism, hospitality and leisure) are still suffering the consequences. Although the trade of goods are going back to normal, touristic services still remain behind. The lack of visitors from other countries has also had an impact on the reduction of foreign capital inflows, which are registered in the Balance of Payments. However, perspectives for the coming months are positive, as most of the restrictions associated to COVID are gradually disappearing and international air traffic is increasing, bringing foreign tourists back to Spain. PALABRAS CLAVE RESUMEN Economía Internacionalización Exportación Balanza de Pagos COVID-19 El Comercio Internacional, como parte de la economía global, ha sufrido las consecuencias de la crisis originada por la pandemia. Este trabajo pretende analizar los efectos sobre las exportaciones e importaciones de bienes y servicios en España. Las conclusiones muestran que las fuertes caídas en algunos sectores han tenido un componente temporal en la mayoría de casos (sobre todo en productos sanitarios y de primera necesidad), aunque otras industrias (como el turismo, la hostelería y el ocio) todavía están sufriendo las consecuencias. Aunque el comercio de bienes se está recuperando, los servicios turísticos todavía quedan atrás. La falta de turistas de otros países también ha tenido como consecuencia la reducción de la entrada de capital exterior, que se registra en la Balanza de Pagos. Sin embargo, las perspectivas para los próximos meses son positivas, ya que la mayoría de restricciones asociadas al COVID están desapareciendo de forma gradual, con el consiguiente incremento del tráfico aéreo y la vuelta de turistas extranjeros a España. DOI: https://dx.doi.org/10.12795/rea.2022.i44.02 Formato de cita / Citation: González-Ferriz, F. (2022). The effect of COVID-19 on international trade: the case of Spain. Revista de Estudios Andaluces, (44), 32-49. https://dx.doi.org/10.12795/rea.2022.i44.02 Correspondencia autores: fernando.gonzale[email protected] (Fernando González-Ferriz) Fernando González-Ferriz / REA N. 44 (2022) 32-49 33 © Editorial Universidad de Sevilla 2022 | Sevilla, España| CC BY-NC-ND 4.0 | e-ISSN: 2340-2776 | doi: https://dx.doi.org/10.12795/rea.2022.i44.02 1. INTRODUCTION The pandemic caused by the arrival of the COVID-19 virus has meant an important threaten worldwide, both in economic and sanitary terms. When markets were growing steadily after the 2008 financial crisis, nobody could imagine a temporary lockdown was coming, and how it would affect not only the economy in general, but also the international trade of goods and services. In the case of Spain, the crisis originated by the virus, which started in mid-March 2020, requested quick and effective economic actions to be taken by the Government. As a consequence, the provision of basic commodities was guaranteed and markets did not collapse. However, some economic sectors (like tourism, hospitality, fashion and non-essential goods) suffered important losses and had to adapt to the new environment. This paper pretends to focus on the economic consequences of the pandemic, something which will be considered throughout the investigation. One important remark, when considering the microeconomic point of view, is the role played by all kind of companies, which had to adapt their business and marketing strategies from one day to the other: in this context, new technologies were determinant to boost online sales and teleworking processes, and they contributed to overcome the difficulties of mobility restrictions and the lack of customers caused by the arrival of the virus. This investigation, however, pretends to quantify the economic effects of the pandemic on the foreign trade in Spain by analyzing the most important macroeconomic indicators, the evolution of exports and imports, and the consequences on the Trade Balance and the Balance of Payments. To do so, the paper will focus on the international trade of goods, but also on the evolution of services, which comprise touristic and non-touristic services. On the other hand, the fact that all markets are connected, will result in a wider analysis, extending the research to the main commercial partners in Europe, in order to demonstrate that even within the block of EU countries, there has not been a homogeneous behaviour of trading partners. Besides, disaggregated statistics will provide details about the consequences on different economic sectors and geographical areas. Regarding the structure of this document, a first part will focus on the theoretical background, which will show the most important fields of investigation and the different approaches incorporated to the literature on the subject. Although the problem can be analyzed from different perspectives, a macroeconomic point of view will be taken into consideration. Despite the fact that the theory on internationalization has been a recurrent subject for several decades, it is quite obvious to say that, the effect of COVID-19 on international markets, comes up like a very recent issue and plenty of work remains to be done. A second stage will lead us to the definition of the methodology carried out in order to achieve the goals of the study. In this context, the descriptive analysis of economic indicators and trade statistics, and the determination of future trends will be the options selected. With reference to the sources, the Spanish Institute of Foreign Trade (ICEX), the National Institute of Statistics (INE) and the Bank of Spain will provide the basic information on the trade of goods and services, and their integration into de Balance of Payments. The analysis of the data is probably the most relevant contribution of this investigation. As aforementioned, a complete analysis will focus not only on the trade of goods, but also on the trade of services, which constitutes a fundamental part of the economy. Although services are more difficult to quantify because of their intangible component, they cannot be left aside, as this sector has provided high added value, interesting profit margins, and sustained growth rates in the last decades. Conclusions will finally concentrate on the presentation of the results from the statistical analysis. They provide a general overview of the subject and pretend to integrate the findings of the academic background with the descriptive analysis carried out. This is also the part where possible future implications are considered once the characteristics of the post-COVID19 scenario have been settled. 2. LITERATURE REVIEW The Theory of Internationalization dates back to the XVIII century, when classical economists like Adam Smith, David Ricardo or Stuart Mill, focused their investigations on macroeconomic approaches, developing Fernando González-Ferriz / REA N. 44 (2022) 32-49 34 © Editorial Universidad de Sevilla 2022 | Sevilla, España| CC BY-NC-ND 4.0 | e-ISSN: 2340-2776 | doi: https://dx.doi.org/10.12795/rea.2022.i44.02 the classical theory of international trade. Accordingly, countries tended to produce the goods for which they had certain advantages in costs or technology, trading with them in international markets. This led to a series of developments to explain the existence of multinational enterprises (MNEs) and the reasons they had to enter new markets. However, most of the academic research soon concentrated on small and medium enterprises (SMEs) and the determinants of their export performance. The latest reviews in this subject (Chen et al., 2016; Chugan & Singh, 2014; Sousa et al., 2008; Leonidou et al., 2002) show that export performance is affected by internal and external factors. External factors are determined by the environment, but cannot generally be modified by the company. On the contrary, internal factors (like human resources, technology, or the marketing strategy itself) are developed by the firm as tangible or intangible assets that will contribute to its competitive advantage. The literature also develops a number of theoretical approaches which are focused on the evolution of market needs and constitute the foundations of the empirical research carried out. The Resource Based View (RBV) is probably the most important one, with plenty of authors (Chien & Tsai, 2021; Collins, 2021; Zhara, 2021; Bouncken et al., 2015) who state that companies must develop a series of capabilities (also known as resources) in order to succeed and differentiate from other competitors. However, this model was critizised for the lack of dynamism, something which led to the theory of Dynamic Capabilities. Scholars like Hunt and Madhavaram (2020), Teece (2018), Pisano (2017) or Ruzzier et al. (2006), determined that the environment is constantly changing, and companies must adapt their strategies to meet customer needs. In such a scenario, firm capabilities must be constantly developed and adapted to new marketing demands, which should be determined by managers. In the same way, the Contingency Theory (Safari & Saleh, 2020; Putri, 2020; Chen et al., 2016) establishes that there is not one solution for every company at every time. On the contrary, each firm needs to develop a particular strategy that will adapt to the evolution of the environment. The directors of a company are responsible for analyzing the specific situation of the market continuously, with the intention to develop a competitive advantage that will lead to a high performance. It is evident that the COVID-19 scenario has brought drastic changes to most companies and industries along the globe. Besides, the pandemic has not followed the same pattern in time in every economy. That is why both the Dynamic capabilities and contingency theories play a fundamental role in present times and are narrowly linked to the implementation of business strategies in every market. Another important contribution when analyzing the destination of exports comes from gradualist models (Johanson & Vahlne, 2009), which describe an internationalization process in which firms tend to enter their closest countries (in terms of distance and cultural similarities) first. In this way, companies who made an effort to diversify their international markets before the pandemic, and tried to reach more distant markets, had to cope with a complicated scenario, as the pandemic has not evolved in the same way everywhere. One of the consequences, in fact, has been the rise in raw material prices, and the lack of certain goods due to temporary mismatches between international supply and demand. And even the prices of freight services have suffered alterations (Aday & Aday, 2020; Sarkis, 2020). Although the literature regarding the effect of COVID-19 in the global economy is, obviously, quite recent, a big number of papers and approaches can be found. Some authors have concentrated on a worldwide background (Sutharshan et al., 2020; Gupta et al., 2020; Cloyne et al., 2020; Harilal 2020). While others have focused on certain areas like the European Union (Cantuche, 2021; Jones, 2020), Asia –mainly China– (Liu et al., 2020; Kumar & Patnaik, 2020) or the USA (Paul et al., 2021; Sansa, 2020). When considering the particular case of Spain, different contributions are remarkable. Some researchers talk about the determinants of export performance ((De Lucio & Fuentes, 2006; Donoso & Martin, 2008; Barrios et al., 2003) or about the way exports have contributed to the GDP (Álvarez-López & Myro, 2018). Others analyze the effects of the pandemic on the economy, in general (Pedauga et al., 2021; Sánchez, 2020), or on the external sector, in particular (Minondo, 2021; de Faria et al, 2021). And an increasing number of papers focus on the comparison between the 2008 and 2020 crises (Pena-Boquete & Dios-Murcia, 2021; de Lucio et al., 2020). The main conclusions show that the 2020 crisis has had tremendous consequences, especially in some particular industries, like touristic services or leisure, although the effect has been temporary, with a quick recovery in most cases. However, unemployment rates have increased seriously in Spain, with young people suffering the worst consequences. Fernando González-Ferriz / REA N. 44 (2022) 32-49 35 © Editorial Universidad de Sevilla 2022 | Sevilla, España| CC BY-NC-ND 4.0 | e-ISSN: 2340-2776 | doi: https://dx.doi.org/10.12795/rea.2022.i44.02 Another important approach comes from the Institutional Based View (IBV) theory, which highlights the importance of public institutions in internationalization processes (Faria et al., 2020; Elango & Dhandapani, 2020). In this context, the Spanish Government has played an important role by introducing measures like the Record of Temporary Employment Regulation to avoid mass redundancies, or tax deferrals to improve the financial situation of enterprises. Besides, the 2021-22 Internationalization Plan for the Spanish Economy developed by the Ministry of Industry, Commerce and Tourism, determines the need to increase the use of New Technologies and the importance of exports in the recovery process. Regarding prospects for the future, an official survey (Encuesta de Coyuntura de la Exportación –ECE) carried out by the same Ministry during the first quarter of 2021, shows positive expectations among export managers, despite the reduction of profit margins. Finally, the use of new technologies has also been analyzed by investigators. The National Institute of Statistics in Spain (INE) analyzes the use of Information and Communication Technologies in the economy and comes to the conclusion that they have been crucial to boost the efficiency of Spanish companies, especially throughout the pandemic. In this context, companies have increased the use of CRM and ERP tools in 2020 and 2021, together with other technologies related to the Internet, such as the Internet of Things (IoT) or Artificial Intelligence (AI), reaching two digits rises in some cases. Consequently, the pandemic has contributed to a high-speed development of digitalization processes, resulting in an increase of online sales and digital communications. 3. METHODOLOGY The methodology of this paper is based on the statistical analysis of the main macroeconomic indicators, especially those related to the external sector (imports, exports and trade balance), without neglecting the most important economic indicators (inflation rate and GDP) in order to consider the national perspective. The overall figures for exports and imports will be divided in two big groups: goods and services. Additionally, services will be considered from two different perspectives: touristic and non-touristic services. Due to the importance of the exports of goods, the information will be disaggregated into geographical regions and economic sectors, and will be compared with the most important commercial partners in Europe. Other indicators to be considered are the Balance of Payments, as it is the tool that integrates all international transactions, and the GDP, as the main indicator for the wealth of a country, and a fundamental reference to calculate relative indexes that will facilitate the comparison different economies. The figures of exports and imports considered in this investigation include all kind of international sales and purchases, whether they come from the European Union or a third country. Besides, the reader should note that exports are considered on FOB conditions (when leaving the country), and imports are considered on CIF conditions (when reaching the country). Another appreciation is that the figures from International Trade statistics or the ones coming from the Balance of Payments might present slight differences due to the economic adjustments that must be made in order to follow international regulations. Finally, all figures are expressed in millions of Euros to facilitate data processing and a better understanding. Regarding the origin of the data, secondary sources have been used at all times. International Trade Statistics regarding exports and imports of goods have been obtained from Estacom and Euroestacom Databases, which can be accessed through the ICEX (Spanish Institute of Foreign Trade) website and include all the information provided by Customs. Nevertheless, statistics about exports and imports of services are more difficult to obtain and every country uses different methods for its quantification (despite the efforts made by OECD and WTO to unify existing criteria). In the case of Spain, this information can be obtained from the Survey on the international trade of services (carried out by the INE, i.e. the National Institute of Statistics) and the statistics from the Balance of Payments, which are made by the Bank of Spain. Other sources are Eurostat, and the IMF (International Monetary Fund). The tool for the descriptive analysis and the presentation of the information has been a traditional Excel spreadsheet. When determining the size of the market, the statistics from ICEX indicate that the total number of exporters was 196,118 in 2020, 6.3% less than the previous year. However, the figure has risen by nearly 30% Fernando González-Ferriz / REA N. 44 (2022) 32-49 36 © Editorial Universidad de Sevilla 2022 | Sevilla, España| CC BY-NC-ND 4.0 | e-ISSN: 2340-2776 | doi: https://dx.doi.org/10.12795/rea.2022.i44.02 in the first semester of 2021 and is still growing in 2022. Another remarkable information is the number of regular exporters, which amounts to 55,133 in 2020 (28.11% of all companies). An important conclusion is that the number of small and medium companies which export regularly has been increasing in the last years despite the effects of the pandemic. 4. RESULTS The analysis of the data provided by statistics and economic indicators will be divided in four different blocks: exports and imports of goods, exports and imports of touristic services, exports and imports of non-touristic services, and Balance of Payments. 4.1. Exports and imports of goods The international trade of goods in Spain has suffered a constant increase since the beginning of the 21st century. Both imports and exports have been growing steadily in the last decades (figure 1), with the only exception of the years affected by the 2008 crisis and, most recently, the time of the COVID-19 pandemic. For a thorough analysis, the detail of monthly and yearly figures are shown on Appendix I. The graphic shows how imports have been traditionally higher than exports, resulting in a negative trade balance. However, the gap has been shrinking since the 2008 crisis, when imports suffered a larger fall, until nowadays (table 1). Only in 2020, the year of the pandemic, the balance reduction (compared to the previous year) was almost a 60%. However, things seem to be going back to the previous situation, as the trade deficit is growing up again in 2021. Another fact to be considered is the effect of both crises on international trade. The picture shows that the effect of the pandemic on exports has been much higher than that of the financial crisis in 2008. On the contrary, the time for recovery has been much lower in 2020, having achieved the same figures for exports only one year later. These findings are totally consistent with the analysis provided by scholars like Pena-Boquete and Dios-Murcia (2021) or de Lucio et al. (2020), when comparing both recessions. Figure 1. Exports and imports of goods since July 2006. Source: Estacom Databases (ICEX). Fernando González-Ferriz / REA N. 44 (2022) 32-49 37 © Editorial Universidad de Sevilla 2022 | Sevilla, España| CC BY-NC-ND 4.0 | e-ISSN: 2340-2776 | doi: https://dx.doi.org/10.12795/rea.2022.i44.02 Table 1. Exports, imports and trade balance since 2019 (million €). Months 2019 2020 2021 exports imports balance exports Imports balance exports imports balance January 23,280 27,204 -3,924 23,142 26,650 -3,507 20,498 22,267 -1,769 February 23,471 26,004 -2,532 23,992 26,109 -2,117 23,542 24,624 -1,082 March 26,105 28,213 -2,108 21,769 23,805 -2,036 28,268 28,680 -412 April 24,811 26,259 -1,448 15,043 16,561 -1,519 25,841 27,138 -1,297 May 26,688 29,279 -2,592 17,515 17,390 124 27,202 27,062 140 June 24,382 25,889 -1,507 22,640 21,158 1,482 27,610 28,587 -978 July 25,912 28,331 -2,419 23,385 23,692 -306 26,568 28,165 -1,597 August 18,823 22,901 -4,078 17,664 19,400 -1,736 22,097 25,974 -3,877 September 23,417 27,476 -4,059 23,250 24,740 -1,490 28,337 30,733 -2,396 October 26,896 29,546 -2,651 25,282 25,932 -651 28,720 32,081 -3,361 November 24,758 26,706 -1,948 24,731 25,324 -593 30,309 34,516 -4,207 December 22,350 24,629 -2,279 22,762 23,835 -1,073 27,618 32,960 -5,342 TOTAL 290,893 322,437 -31,544 261,175 274,598 -13,422 316,609 342,787 -26,178 Source: Estacom Databases (ICEX). Another important evaluation was carried out by obtaining the variations of international trade indicators in the last three years (table 2). While the total amount of exports and imports rose by 1.97% and 0.87% in 2019, they fell by 10.22% and 14.84% respectively in 2020, because of the pandemic. The highest reductions came in March (we must remind that the lockdown in Spain started in the middle of the month), April and May, with figures around 40% both for exports and imports. Luckily, the crisis represented an effect in the form of a “V” with a quick fall, but also a rapid recovery. Table 3 represents the destination of Spanish exports depending on their relative importance. The statistics show that France is the first commercial partner, followed by other European countries like Germany, Italy, Portugal and Great Britain. Besides, they altogether represent approximately 50% of total exports. Although other areas like USA or China are gaining positions in the overall ranking, an effort should be made to promote sales in markets outside the European Union which represent a big potential. It should also be noted that the biggest falls in the first semester of 2020 (COVID-19 period) corresponded to Italy, United Kingdom (with additional effects coming from the Brexit) and Morocco, with decreases above the average. However, the figures for 2021 show a total recovery, with similar values to the ones before the pandemic, in most cases. When analyzing the variations by economic sectors, the conclusions show that the effect of the crisis has not been the same for all of them. While exports for some of the so-called “essential” industries (like food, drinks, sanitation or healthcare) did not represent important falls (some of them even increased their sales), others like consumer goods, industrial products or technology suffered the worst consequences. Disaggregated figures show that the variations for the first semester of 2020 (when compared to the same period of 2019) in fish and seafood were -15%, while meat products and derivates represented increases above 20%. Regarding the drinks industry, wines and other alcoholic drinks fell by 10%, while soft drinks rose by 4%. Consumer goods showed negative results in general, with decreases of -29% in fashion and -16.32% in home products. Finally, the industrial and technology sectors presented mixed results, with technologies associated to food or agricultural products showing the lowest reductions (-10%), those related to transport with falls above 30%, and cleaning products showing slight increases above 3%. Fernando González-Ferriz / REA N. 44 (2022) 32-49 38 © Editorial Universidad de Sevilla 2022 | Sevilla, España| CC BY-NC-ND 4.0 | e-ISSN: 2340-2776 | doi: https://dx.doi.org/10.12795/rea.2022.i44.02 Table 2. Variations of exports and imports since 2019 (million €). Months 2019 2020 2021 % exports % imports % exports % imports % exports % imports January 1.20% -0.40% -0.59% -2.04% -11.43% -16.45% February 3.33% 3.63% 2.22% 0.41% -1.88% -5.69% March 3.81% 6.75% -16.61% -15.62% 29.85% 20.48% April 1.70% -3.06% -39.37% -36.93% 71.79% 63.86% May 4.22% 6.03% -34.37% -40.60% 55.31% 55.61% June -2.71% -5.03% -7.14% -18.27% 21.95% 35.11% July 5.74% 1.09% -9.75% -16.37% 13.61% 18.88% August -6.80% -2.07% -6.16% -15.29% 25.10% 33.89% September 4.96% 8.09% -0.71% -9.96% 21.88% 24.22% October 2.52% -1.87% -6.00% -12.23% 13.60% 23.71% November -0.99% -3.23% -0.11% -5.18% 22.55% 36.30% December 6.05% 1.30% 1.84% -3.22% 21.33% 38.28% TOTAL 1.97% 0.87% -10.22% -14.84% 21.22% 24.83% Source: Estacom Databases (ICEX). Table 3. Destination of Spanish exports (million €). 2018 January - June 2019 January - June %2018/19 2020 January - June %2019-20 2021 January - June %2020-21 FR -- France 22,520 22,627 0.48% 19,621 -13.29% 24,816 26.48% DE -- Germany 16,327 16,683 2.18% 14,151 -15.18% 16,477 16.44% IT – Italy 11,958 12,170 1.77% 9,556 -21.48% 12,917 35.17% PT -- Portugal 10,613 11,055 4.16% 9,196 -16.82% 11,326 23.16% GB – G. Britain 9,816 10,213 4.04% 8,012 -21.55% 9,228 15.18% US – USA 6,399 6,814 6.49% 6,142 -9.86% 7,080 15.27% BE -- Belgium 4,521 4,080 -9.75% 3,504 -14.12% 6,256 78.54% NL -- Holland 4,937 5,268 6.70% 4,403 -16.42% 5,415 22.98% CN -- China 3,102 3,163 1.97% 3,539 11.89% 4,653 31.48% MA -- Morocco 4,288 4,258 -0.70% 3,352 -21.28% 4,565 36.19% Subtotal 94,481 96,331 1.96% 81,476 -15.42% 102,733 26.09% Total 145,934 148,737 1.92% 124,101 -16.56% 152,961 23.26% Source: Estacom Databases (ICEX). Fernando González-Ferriz / REA N. 44 (2022) 32-49 39 © Editorial Universidad de Sevilla 2022 | Sevilla, España| CC BY-NC-ND 4.0 | e-ISSN: 2340-2776 | doi: https://dx.doi.org/10.12795/rea.2022.i44.02 The distribution of exports according to geographical areas within Spain is shown on table 4. Results show that three regions (Catalonia, Valencian Community and Madrid) concentrate half of them, with similar reductions (around 15%) in the first semester of 2020 (compared to the same period in 2019). Exports from the Vasc Country, on the contrary, presented larger decreases (-24.46%), something which can be explained by the bigger exposure to industrial goods, and a more modest development of sectors like agricultural or meat products. On the other hand, while most regions have gone back to the figures before the pandemic, the Vasc Country and Andalusia still remain behind, although the situation is not troublesome. Table 4. Distribution of exports by regional areas (million €). 2018 Jan - June 2019 Jan - June %2018-19 2020 Jan - June %2019-20 2021 Jan - June %2020-21 Spain 145,934 148,737 1.92% 124,101 -16.56% 152,961 23.26% Catalonia 36,243 37,487 3.43% 30,951 -17.44% 39,685 28.22% Valencian C. 16,007 16,407 2.50% 13,948 -14.99% 16,180 16.00% Madrid 14,673 15,521 5.78% 13,389 -13.74% 18,029 34.66% Andalusia 17,290 17,208 -0.47% 14,593 -15.20% 16,836 15.37% Vasc Country 13,246 13,314 0.51% 10,058 -24.46% 12,466 23.94% Galicia 11,011 10,546 -4.22% 8,651 -17.97% 11,333 31.00% Source: Estacom Databases (ICEX). The figures of the falls in exports in the first semester of 2020 can be fully appreciated on the following map of Spain by geographical regions (figure 2). Figure 2. Evolution of exports in the first semester of 2020 in Spain by regions. Source: Estacom Databases (ICEX). Fernando González-Ferriz / REA N. 44 (2022) 32-49 40 © Editorial Universidad de Sevilla 2022 | Sevilla, España| CC BY-NC-ND 4.0 | e-ISSN: 2340-2776 | doi: https://dx.doi.org/10.12795/rea.2022.i44.02 Finally, variations of international sales in 2020 for the most important European exporters are presented on table 5. The figures show that the reductions in Germany and Italy (-9.38% and -9.74%) were very similar to the ones in Spain (-10.22%), while the Netherlands presented a lower fall (-7.38%), and France showed the worst results (-16.19% in the year, and above 42% in April and May). Once again, exports have gone back to previous numbers in most of them, with clear signs of recovery. Table 5. Variation of exports in Europe in 2020 (million €). Spain Germany Holland France Italy January -0.59% -2.01% 1.97% -4.66% 1.13% February 2.22% 0.19% 0.35% -0.80% 6.05% March -16.61% -8.00% -7.27% -15.79% -14.83% April -39.37% -31.36% -19.67% -42.22% -43.03% May -34.37% -30.09% -22.57% -42.33% -30.43% June -7.14% -9.66% -6.43% -18.60% -12.87% July -9.75% -11.32% -6.54% -17.02% -8.62% August -6.16% -10.47% -13.09% -19.25% -7.02% September -0.71% -4.15% -5.50% -6.24% 1.14% October -6.00% -6.35% -9.20% -12.31% -8.44% November -0.11% -0.96% -1.80% -7.73% 1.07% December 1.84% 3.17% 1.16% -4.57% 3.31% TOTAL -10.22% -9.38% -7.38% -16.19% -9.74% Source: Euroestacom Databases (ICEX). 4.2. Exports and imports of touristic services The touristic sector in Spain has been one of the most important inputs to the economy in the last decades, with a 12.4% contribution to the GDP in 2019. Besides, an important part of the industry refers to services provided to foreigners, a concept which is integrated in the balance of payments, together with the trade of goods and non-touristic services. According to the Ministry of Commerce, Industry and Tourism, services account one third of total exports in 2019 (148,000 out of 433,000 million Euros), half of which refer to tourism. Besides, the fact that the country highly depends on the services sector should be considered positively, as it generates very considerable employment rates and elevated profit margins, due to the incorporation of a superior added value. However, this has been one of the most affected sectors by the pandemic. The lack of tourists (with a fall of 78%), due to lockdown measures and restrictions to the mobility of individuals, has meant a reduction from the aforementioned 12.4% contribution to the GDP in 2019 to a 4.3% in 2020 (Spanish Institute of Statistics). Not in vain, Spain suffered the biggest reduction from the twenty first countries in the rank, followed by the United Kingdom, China or Turkey. This has led to an industry which concentrates 56% of all Records of Temporary Employment Regulation, needing to face very important structural changes in order to adapt their businesses to the changing regulations. Even so, employers predict a certain recovery, especially in the summer months, that might lead to a 8.2% contribution to the GDP at the end of the year. Fernando González-Ferriz / REA N. 44 (2022) 32-49 47 © Editorial Universidad de Sevilla 2022 | Sevilla, España| CC BY-NC-ND 4.0 | e-ISSN: 2340-2776 | doi: https://dx.doi.org/10.12795/rea.2022.i44.02 Jones, E. (2020). COVID-19 and the EU Economy: Try Again, Fail Better. Survival, 62(4), 81-100. https://doi.org/10.1080/00 396338.2020.1792124 Kumar Das, D., & Patnaik, S. (2020). The Impact of COVID-19 in Indian Economy–An Empirical Study. 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Visual chart can be appreciated on figure 1. 2007 2008 2009 2010 2011 Month X IM Bal X IM Bal X IM Bal X IM Bal X IM Bal I 14,402 22,331 -7,930 15,922 25,543 -9,621 11,536 16,088 -4,553 12,624 17,579 -4,954 16,614 21,991 -5,377 II 15,217 22,498 -7,281 16,933 25,143 -8,210 12,738 16,973 -4,236 14,504 17,828 -3,324 17,677 21,184 -3,507 III 17,375 25,079 -7,704 15,677 24,046 -8,369 14,187 17,341 -3,154 16,820 21,316 -4,496 20,529 24,807 -4,278 IV 14,251 22,246 -7,995 18,073 26,437 -8,363 13,400 16,144 -2,744 14,680 19,733 -5,053 17,523 21,353 -3,830 V16,668 24,741 -8,073 16,842 24,909 -8,067 13,041 15,627 -2,586 16,049 20,277 -4,228 18,748 22,469 -3,721 VI 16,377 25,133 -8,756 15,632 25,216 -9,584 14,197 17,393 -3,196 16,715 21,381 -4,665 18,918 22,256 -3,338 VII 16,061 24,758 -8,697 18,123 25,739 -7,616 14,496 17,792 -3,295 16,350 20,545 -4,194 18,141 21,156 -3,016 VIII 12,027 19,909 -7,882 12,011 19,151 -7,141 10,052 14,369 -4,317 12,573 17,216 -4,643 14,577 19,383 -4,806 IX 14,848 23,760 -8,912 16,411 24,230 -7,819 13,920 18,892 -4,972 16,093 20,454 -4,361 18,486 22,844 -4,358 X17,304 26,536 -9,233 16,682 24,813 -8,132 14,870 18,868 -3,998 17,142 20,933 -3,791 18,085 21,460 -3,375 XI 16,949 25,198 -8,249 14,670 19,559 -4,889 14,088 18,839 -4,752 17,505 21,649 -4,144 18,809 22,942 -4,133 XII 13,544 22,848 -9,304 12,252 18,602 -6,350 13,365 17,791 -4,425 15,723 21,145 -5,422 17,124 21,295 -4,171 TOTAL 185,023 285,038 -100,015 189,228 283,388 -94,160 159,890 206,116 -46,227 186,780 240,056 -53,276 215,230 263,141 -47,910 2012 2013 2014 2015 2016 Month X IM Bal X IM Bal X IM Bal X IM Bal X IM Bal I 17,571 21,212 -3,642 18,699 22,094 -3,395 19,157 21,886 -2,729 18,484 21,011 -2,527 18,591 21,082 -2,491 II 18,498 22,370 -3,872 19,200 19,999 -799 19,788 21,303 -1,515 19,979 22,274 -2,295 21,030 22,307 -1,277 III 20,336 23,834 -3,498 21,090 20,076 1,014 20,528 22,477 -1,949 23,106 24,441 -1,335 22,172 23,332 -1,161 IV 17,636 20,990 -3,354 20,467 22,201 -1,734 19,770 21,513 -1,743 20,763 23,170 -2,406 22,276 22,952 -675 V19,848 22,284 -2,436 20,938 21,475 -537 20,510 22,622 -2,112 21,228 22,515 -1,286 22,207 22,993 -786 VI 19,417 21,718 -2,302 20,399 20,570 -171 20,887 22,464 -1,577 22,401 24,250 -1,850 22,838 24,122 -1,284 VII 19,900 22,113 -2,213 20,865 22,104 -1,239 21,883 23,746 -1,863 23,298 24,758 -1,460 22,155 21,992 163 VIII 16,177 19,451 -3,274 16,417 18,138 -1,722 15,677 18,688 -3,011 15,807 19,201 -3,394 17,354 20,054 -2,701 IX 18,222 20,889 -2,667 18,918 21,491 -2,573 20,797 23,337 -2,540 21,058 23,986 -2,928 21,611 23,511 -1,899 X20,912 22,586 -1,674 21,286 22,647 -1,361 22,139 24,723 -2,585 22,074 23,795 -1,721 21,759 23,634 -1,876 XI 19,786 21,359 -1,574 19,177 21,219 -2,043 20,225 21,613 -1,388 21,600 23,537 -1,937 23,526 24,755 -1,229 XII 17,814 19,139 -1,325 18,358 20,333 -1,974 19,223 21,183 -1,960 19,996 21,834 -1,838 20,875 23,045 -2,170 TOTAL 226,115 257,946 -31,831 235,814 252,347 -16,533 240,582 265,557 -24,975 249,794 274,772 -24,978 256,393 273,779 -17,385 Fernando González-Ferriz / REA N. 43 (2022) 32-49 49 2017 2018 2019 2020 2021 Month X IM Bal X IM Bal X IM Bal X IM Bal X IM Bal I 22,109 25,016 -2,906 23,005 27,313 -4,308 23,280 27,204 -3,924 23,142 26,650 -3,507 20,498 22,267 -1,769 II 22,235 24,708 -2,473 22,715 25,094 -2,379 23,471 26,004 -2,532 23,992 26,109 -2,117 23,542 24,624 -1,082 III 26,599 28,071 -1,472 25,148 26,430 -1,281 26,105 28,213 -2,108 21,769 23,805 -2,036 28,268 28,680 -412 IV 21,200 22,440 -1,240 24,396 27,087 -2,691 24,811 26,259 -1,448 15,043 16,561 -1,519 25,841 27,138 -1,297 V24,937 26,957 -2,020 25,608 27,615 -2,007 26,688 29,279 -2,592 17,515 17,390 124 27,202 27,062 140 VI 24,233 25,509 -1,276 25,062 27,259 -2,197 24,382 25,889 -1,507 22,640 21,158 1,482 27,610 28,587 -978 VII 22,201 24,512 -2,311 24,506 28,026 -3,520 25,912 28,331 -2,419 23,385 23,692 -306 26,568 28,165 -1,597 VIII 18,825 22,053 -3,228 20,196 23,386 -3,189 18,823 22,901 -4,078 17,664 19,400 -1,736 22,097 25,974 -3,877 IX 22,958 25,584 -2,626 22,310 25,420 -3,109 23,417 27,476 -4,059 23,250 24,740 -1,490 28,337 30,733 -2,396 X24,543 27,247 -2,704 26,235 30,110 -3,876 26,896 29,546 -2,651 25,282 25,932 -651 28,720 32,081 -3,361 XI 25,120 27,107 -1,987 25,006 27,597 -2,591 24,758 26,706 -1,948 24,731 25,324 -593 30,309 34,516 -4,207 XII 21,184 23,228 -2,045 21,074 24,312 -3,238 22,350 24,629 -2,279 22,762 23,835 -1,073 27,618 32,960 -5,342 TOTAL 276,143 302,431 -26,288 285,261 319,647 -34,387 290,893 322,437 -31,544 261,175 274,598 -13,422 316,610 342,787 -26,177 Source: Euroestacom Databases (ICEX).