Spain 'should look to eastern markets'
13 April 2004, BARCELONA - Spain has lost much of its competitiveness in foreign markets, according to a study published Tuesday.
13 April 2004
BARCELONA - Spain has lost much of its competitiveness in foreign markets, according to a study published Tuesday.
In the early Nineties, it had an "outstanding" position in foreign markets.
Between 1991 and 1995, it was the sixth most competitive in the EU market, but was not among the top-ten exporters to the US and South-east Asia.
However, between 1995-2001, Spain declined in the ranking of the most competitive EU countries.
The study for La Caixa bank said: "Spain was one of the top ten most competitive countries in Europe in the first half of the Nineties, but has lost this position and moved out of this group in the last five years of the decade."
It added: "One of the threats to the Spanish economy in recent years has been that its increased income has not been accompanied by increased productivity. This will
cost Spain advantages it previously enjoyed in the market."
Spain's lack of specialisation in industries with the fastest expanding markets was seen as a major problem.
During the 1990s, Spain benefited from lower average prices than the rest of the EU.
The report said: "The devaluation of the peseta helped the Spanish economy. However, there are limits to how long this advantage can last in the future."
The decrease in competitiveness in the last five years of the 1990s happened at the same time as an improvement in income and the rise in costs.
The report added: "The decrease in Spain's competitiveness occurred because of inflation on one hand and the low level of productivity on the other."
The report said the Spanish economy is biased towards exporting to the EU market but has a low-profile in Asian market.
It added that the slow-down in competitiveness has produced an environment of moderate salaries and a slow advance in productivity and bigger inflation.
The study concluded that Spain should depend less on the EU market and change its orientation towards markets with products whose demand in rising more rapidly.
[Copyright EFE with Expatica]
Subject: Spanish news