catalan economy

The Catalan company has signed an agreement with the Shah Deniz consortium for a 25-year period. The Azerbaijani company will supply 1bcm of natural gas per year. The agreement is conditional on the final decision on the project investment, a step planned for later this year. The development of this project will open a new supply route to Europe through the ‘Southern Corridor’, which will allow Europe to access gas reserves in the Caspian Sea area. Barcelona-based Gas Natural Fenosa will receive the gas in facilities based in Italy, one end of the European gas pipeline passing through Georgia, Turkey, Greece, Albania, and crossing the Adriatic Sea. The Catalan company said that this supply will consolidate its presence and strengthen its gas supply business in Italy.

The President of the Catalan Government, Artur Mas, wanted to clarify some doubts about Catalonia’s EU membership in the event of becoming an independent state, specifically regarding economic issues. The Catalan Government is insisting that the treaties do not say that a separated part would automatically be expelled from the EU and that the issue would require a political negotiation. However, the Catalan President emphasised on Thursday that what is crystal clear is that “whatever Catalonia decides [regarding its independence from Spain], it will have the Euro as its currency”. Mas was answering the international investors behind BCN World, a €4.5 billion leisure resort. On Wednesday they stated that they do not care whether Catalonia remains in Spain or not, but they do care whether it has the euro and remains within the EU internal market.

The European Commissioner for Internal Market and Services, Michel Barnier, repeated on Wednesday the answer given by Romano Prodi on a question about Algeria and its hypothetical EU membership on the basis of its French past: “if a region separates itself from a Member State, it quits de facto the European Union”. Barnier emphasised that this is a “general” opinion. However, he added that the European Commission will only issue its definitive opinion about an independent Catalonia on the basis of “a precise scenario” and refuses to “speculate” about the Catalan case. Besides, the President of the Catalan Government, Artur Mas, affirmed that questioning Catalonia’s “economic integration within the EU” follows “controversies stirred up by interested parties”.

A report issued by the Spanish Ministry of Industry, Energy and Tourism reveal how Catalonia has received €7.68 billion from foreign tourist expenditure between January and July of this year. The figure represents an increase of 9.8% on 2012, and also means that Catalonia received 23.9% of Spain’s total foreign tourist spending, higher than any other area. Meanwhile, each tourist spent an average of €878 during their visit – 4.4% higher than last year’s figures. The average daily expenditure also increased by 1.2% on last year to €123. The Canary Islands received the second highest amount of foreign tourist expenditure with €6.24 billion, while The Balearic Islands were third with €5.67 billion.

According to figures released by the Spanish Institute of Statistics, overnight hotel stays among foreigners in Catalonia have increased by 2.5% during July compared to the same month of 2012. While there has been an increase in the amount of foreigners visiting, the rate of hotel stays among the Spanish population in Catalonia is down by 7.3%. In total, the amount of overnight stays among foreigners in Catalonia during July was 5.82 million, while for Spanish nationals this figure was 1.57 million. Catalonia accounts for 23.2% of total hotel stays among foreigners in Spain, second only to the Balearic Islands with 37.9%.

Since January, 8.7 million foreign visitors have come to Catalonia, a rise of 5.1% on the same period of 2012. Catalonia has become the main tourist destination in the whole of Spain during July, with 2.1 million foreign visitors, according to a survey carried out by the Institute of Touristic Studies. This figure represents a 3.1% rise on July 2012. Catalonia now receives 26.7% of Spain’s total international tourists. French tourists account for the largest share, with an increase of 1.9% on last year, representing a third of all foreign tourists. However, it is Russians that have contributed most to this significant growth. Spain as a whole received 34 million tourists since January, with July setting a new record.

The Spanish Deputy Minister for Trade, Jaime García Legaz, acknowledged on Thursday that Catalonia is the “main exporting community” within Spain. Between January and July, Catalonia’s exports had a value of €29.23 billion, representing 24.6% of Spain’s total in that period. During his speech, García Legaz failed to confirm the statement made by Madrid’s regional Government that more than 1,000 Catalonian companies have moved to Madrid since 2010. He insisted that he lacks “reliable data” on this issue and is therefore “not in a position to make an informed judgement”. A total of seven Autonomous Communities within Spain have experienced an increase in their exports this year.

According to a figures released by the Spanish Institute of Statistics (INE), Catalonia’s annual inflation rate fell from 2.6% to 2.1% between June and July. This is the second lowest annual inflation rate that Catalonia has experienced this year, with the lowest being during April when the figure was 1.8%. July’s annual inflation rate in Catalonia is higher than that of the whole of Spain, which is set at 1.8%. The main reason for this fall on last year’s results can be explained because of the lower rate of increases in electricity prices (compared to last year’s rise), as well as the end of the statistical effect of the pharmaceutical co-payment, which was implemented in July 2012 and significantly raised the consumer price of drugs.

According to data released by the Catalan Finance Ministry, the Catalan economy has stopped the fall in GDP during the second quarter of 2013, since it remained at the same rate of the previous quarter. There has been a slow strengthening of the Catalan economy over the last few months: the fourth quarter of 2012 saw a reduction of 0.7%, the first quarter of 2013 GDP only shrunk by 0.1% and during the second quarter it remained stable at 0% growth. The improvement has been due to the industrial sector, particularly thanks to the exportation of goods which made up for the sustained falling of domestic demand. However, compared to the same figures for last year, the Catalan economy decreased by 1.3%.

Container exports from the Port of Barcelona reached 276,566 TEU’s for the first half of this year, an increase of 12% on the same period of 2012. North Africa and the Far East have significantly grown as the destinations of exports from the Catalan harbour. Furthermore, among the highest exports are motor vehicles and bulk solid cargo such as cement. The Catalan Minister of Planning and Sustainability, Santi Vila, stressed the importance of the Port as an economic engine and the fact that it has changed itself from being an importer to an exporter of goods in recent years.

By the end of July there were 6,859 fewer people registered at the Catalan Public Employment Service (SOC) than a month ago, which leaves the total number of registered unemployed individuals at 610,429. The current amount of jobseekers is now the same level as September 2011. Unemployment levels have been decreasing in Catalonia for the last five consecutive months. In addition, last July’s drop is the most significant reduction in this month of the year since 2010. In the whole of Spain, the unemployment rate decreased by 1.36%, with 64,866 fewer people registered at the Public Employment Service offices. This means that by the end of July there were 4,698,814 individuals registered as unemployed in Spain. The Catalan Government states that, if the trend is kept during the second semester, the economic crisis would have reached “its lowest level” earlier this year.

The Catalan Finance Minister, Andreu Mas-Colell, accuses the Spanish Government of “asphyxiating” the Autonomous Communities. The 1.58% deficit target imposed to the Catalan Government represents €2.6 billion of further budget adjustment compared to last year’s budget, which ended with a 1.96% deficit. Mas-Colell denounced that the Spanish Executive is “keeping for itself the greatest share of the deficit pie”, while it is only responsible for 50% of Spain’s public spending. The Spanish Government is setting itself a deficit target of 5.2% for 2013 and most of the flexibility allowed by the European Union, which authorised a 6.5% deficit for Spain’s total public sector. Meanwhile, the Autonomous Communities have a deficit target 4 times stricter, although they manage 36% of Spain’s total public spending as well as basic services such as healthcare and education.

Barcelona’s Chamber of Commerce has presented the results of the economic situation of Catalonia during the second quarter of the year. It is estimated that GDP rose by 0.1% on the second quarter, following 18 months of negative growth. President of the Chamber, Miquel Valls, attributes this increase to a new economic model based upon high levels of tourism and exportation, which has boosted activity in the industrial sector. Regarding outlook for the third quarter, the Chamber expects this growth to continue which will improve the business climate within Catalonia.

By the end of June, there were 873,000 people in Catalonia without work and looking for employment, according to the latest Active Population Survey (EPA). This represents 29,300 fewer individuals than 3 months ago, which is the highest unemployment reduction in the second quarter of the year since 2002. However, employment levels have only increased by 11,800 people, which means that this year Catalonia has experienced the lowest increase in job creation for this period of the year since 1998. The Catalan unemployment rate is now 23.85%, while the Spanish average is 26.6%. In the whole of Spain, the number of people unemployed decreased by 225,200, which means that the total number of unemployed people is now below the psychological landmark of 6 million individuals (5,977,500).

The Catalan Parliament has devoted a two-day plenary session to debate the youth unemployment problem and how it could be reduced. According to the latest Active Population Survey (EPA), the youth unemployment rate in Catalonia reached 52.7%. This means that 1 out of 2 youngsters between 16 and 24 years old who want to work cannot find a job. Around 151,000 youngsters are unemployed in Catalonia; 64% of them worked in the service sector and 17% have never worked. The Catalan President, Artur Mas, asked to manage the proportional share of the European Union’s funds allocated to fight youth unemployment in Spain, since the Catalan Executive holds the competences.