Portugal & Spain

Portugal’s economic growth exceeded forecasts and averaged 6.8% in 2022 - the second-largest expansion in the EU and proof of the country’s economic potential and stability in crisis situations. The biggest contributors to this outstanding growth were exports, which have reached almost 50% of the country’s GDP, and the tourism industry.

Portugal’s inflation rate dropped from 9.9% to 9.6% at the end of the year, and it is likely to remain at the current level in January and February as a result of salary increases of an anticipated 4%. However, it is thought that consumer prices might decrease from March onwards.

Spain’s GDP growth managed to exceed the forecasted 5% thanks to ongoing investments, a strong labour market and high export levels. In addition, Spain’s inflation rate in December was one of the lowest in the EU at 5.7% - the same as in November 2021. However, the average inflation rate for the whole of 2022 remained one of the biggest in history at 8.3%. Among the main problems, food prices have climbed by up to 15.7% and are still rising.

In addition, Spain joins other EU countries in continuing to suffer the effects of high gas and electricity costs; in order to reduce the influence of volatile pricing, Spain has proposed independent price-setting for renewable energy sources instead of them being correlated with current gas prices. Agreement on this issue is likely to be reached at the end of spring.

Owing to high LME values, January has brought a growth in demand which has led to material shortages on the market. With LME gains, aluminium scrap prices are currently heading higher; however, copper percentages are going down as customers look for bigger discounts.