Spain set to re-enter Germany’s top 10 export markets as shipments jump

Spain is set to become the fastest-growing destination among Germany's 10 biggest export markets in 2025, with shipments forecast to rise 8.5% to 58.8 billion euros ($69.31 billion), a Germany Trade & Invest (GTAI) projection showed.

The increase would lift Spain into 10th place among the customers of Europe's largest economy for the first time since 2009, according to the forecast seen by Reuters on Tuesday.

The surge in Spanish demand contrasts with declining German exports to major markets, including China and the United States. German shipments to China are set to fall 10% this year and a 7.3% decline is projected for the U.S.

Spain's real economic growth, forecast to be just under 2.9% for 2025, is markedly above Germany's 0.3%, OECD forecasts show, which will boost demand for German goods and push bilateral trade volumes close to 100 billion euros, the GTAI said.

"German companies are also benefiting from the good economic situation," said Friedrich Henle, GTAI's foreign representative in Madrid, pointing to private consumption as a key driver of growth in Spain, supported by a tourism boom and higher immigration. 

Spanish imports of investment goods are growing strongly this year, Oxford Economics chief Europe economist Angel Talavera said, adding that Germany's export mix is well suited to the shift.

He said exports from Germany to elsewhere in the European Union could offset weakness in sales to the U.S. and China, noting that 10% of German exports go to the U.S. and 6% to China, while 54% go to the rest of the EU. 

This means a 10% drop in exports to the United States and China would be offset by a 3% increase in exports to the rest of the 27-nation EU, according to Talavera. 

"The problem is that today the weakness of Europe's domestic demand makes it difficult to achieve even relatively moderate export growth," he said. 

($1 = 0.8484 euros)