catalan economy

We’ll have to wait and find out, believes president of Small and Medium Business in Catalonia, while the secretary of economy is confident companies and banks will come back

European markets also recovered on Wednesday, as fears over political crisis momentarily subside

Overseas Catalan sales account for more than 25% of Spanish total

Chamber of Commerce presents revised report predicting GDP growth of 3.1% and labels threats to cut off funding to Catalonia “not viable” as an option for Spanish government

Economy and treasury minister admits concern over unemployment but insists rate will drop to under 11% by end of 2018

The Catalan Ministry for Economy and Tax Office presented this Wednesday the data of the macroeconomic chart to be included in the budget for 2017, which the Catalan executive expects to pass next week.  According to this document, the Catalan economy’s expected growth will be 3.4%, 0.5% more than the growth forecast for the Spanish economy, which is expected to be 2.9%. Regarding 2017, the chart keeps the figure released last May which foresaw 2.7% growth. According to the Catalan Vice-president and Minister for Economy and Tax Office, Oriol Junqueras, this figure is “considerably higher” than the expected growth for the Eurozone (1.5%). The budget for 2017 also foresees the creation of 160,000 jobs between 2016 and 2017. 

In annual terms, the Catalan economy grew by 3.3% in the third quarter of 2016 according to official data released this week by the Catalan Ministry for Economy and Tax Office and the Statistical Institute of Catalonia (Idescat). This increase is mainly thanks to the boost provided by the services sector, which saw annual growth of 3%, and the acceleration of the industrial sector, whose growth stood at 4.9%, the highest for the last six years. The quarterly growth rate, however, stood at 0.7%, one tenth lower rise than the previous quarter, but four percentage points above the Eurozone average. According to the data, there is a slight slowdown in the expansion of the Catalan economy, as annual growth in the first and second quarter of this year were 3.7% and 3.5%, respectively.  

Neither ‘Brexit’ nor the lack of a government in Spain seem to have affected the progress of the Catalan economy, which registered 3.5% growth at the end of the second quarter of 2016 compared to the same period last year. According to figures released this Thursday by the Catalan Finance Ministry and the Catalan Statistics Institute (Idescat), the pace of growth in  the second quarter was 0.8% in terms of GDP, the same figure registered in the previous quarter. Regarding the economic sectors, industry registered the highest growth, even higher than the Eurozone average. Considering these figures, the forecasts for the whole of 2016 made by the Catalan Department for Economy may have to be revised upwards, since in May the body estimated a 2.9% growth for the whole year.

Barcelona’s Chamber of Commerce estimates that the Catalan economy grew by 3.2% in 2015, which is more than double the figure for 2014 and marks a return to pre-crisis levels, when the GDP increased by 1.5%. To “keep on advancing on the path of economic recovery” and to respond to Catalonia’s push for independence and “guarantee the territorial stability”, the president of Barcelona’s Chamber of Commerce, Miquel Valls, called for “the widest consensus possible” amongst the main parties with representation in the Spanish Parliament. He also emphasised the “fundamental” need to keep the relationship and the compromises established with the EU, as the 40-billion-euros rescue package for the banks in Spain led to the recovery of the risk premium and brought back the trust in the Spanish market.

The Bank of Spain Govenror, Luis Maria Linde, corrected his previous statement and admitted that “freezing bank accounts” if Catalonia becomes an independent country is a very “improbable, almost impossible” situation. Linde’s clarification comes after his statements last week assuring that Catalonia would face a ‘corralito’ in the event of independence. He added this Wednesday that he wasn’t “that worried” about this possibility nor is “anybody else in Europe”. Following Linde’s warning, a group of six prestigious economists asked for the Governor’s resignation and recalled that Linde’s task should be “promoting financial stability” rather than “influencing thevoters’ decisions”.

Catalan exports grew 7.4% in July and exceeded the €6,000 million barrier for the first time. The total figure was €6,086.30 million and the 4 regions in Catalonia (Barcelona, Girona, Tarragona and Lleida), all obtained positive results, according to the Spanish Ministry of Economy and Competitiveness. Sales increased in the leading export sectors, which involve chemical, automotive and capital goods, with the automotive sector recording the highest increase, up 18.2% compared to last July. Since the beginning of this year, every month has recorded the best performance in export volume and if this trend keeps up, 2015 will be a  record year. In Spain as a whole, exports in July were worth 148,000 million euros, the best month ever recorded.

Catalan companies sold abroad some €31,899.9 million worth of goods and services between January and June this year, which represents a 7.16% increase on the figures from the first six months of 2014, according to information released on Tuesday by the Spanish Ministry for the Economy and Competitiveness. Catalan exports have never before reached such a high sales volume for a six-month period. Not only this, the level of international sales registered during June alone also broke all previous records for this month, coming in at €5,662.1 million. Indeed, almost month after month Catalonia's export records were broken during the first half of this year and the Catalan economy has seen exports rocket during the last 3 years. In Spain as a whole, international sales have also broken all previous records in the first half of 2015, reaching 125,122.9 million, a 4.9% growth on figures from the first 6 months of 2014. Thus, the Catalan economy generated 25.49% of Spain's total exports, while representing 19% of its GDP and 16% of its population.

The Port of Barcelona has been opening new regular routes for container transportation in the last few months, improving the connections with strategic markets in the Americas, Asia, West Africa and the Mediterranean area. An example of this trend is the new route served by MNM African Shipping Line, a company founded this year based in the port of Tanger-Med and working for transport and logistics firms from Morocco and Nigeria. This new line will be using vessels with a 2,500 TEU container capacity to connect the Catalan capital with major ports in North and West Africa such as Tangier, Casablanca, Agadir, Nouakchott, Dakar, Conakry, Lagos, Tema and Abidjan, covering an area with some 300 million people.

Catalonia’s annual inflation rate increased from a rate of 0.3% in June to 0.4% in July, according to information released on Thursday by the Spanish Statistics Institute (INE). This is the highest yearly rate since June 2014, when prices also increased 0.4% compared to the previous year. In Spain as a whole, annual inflation continued at the 0.1% rate registered in June. Therefore, deflation is gradually being left behind, although price increases are still at a low level, mostly due to the continuing low price of fuel on the global market. However, in monthly terms, prices declined by 0.8% in Catalonia, mainly owing to a 13.3% drop in the price of retail goods due to seasonal sales, but also because of a 0.5% drop in the price of fruits and vegetables. The increase in housing rentals, communications and entertainment, mostly travel industry, have not been able to compensate for the aforementioned declining prices in monthly terms.

The Catalan GDP increased by 0.9% between April and June this year, which is a positive figure but slightly lower than the 1.1% rate registered during the first quarter. However, in annual terms, the Catalan economy grew by 3% in the year to June, which is more than the 2.6% annual growth registered in March. Such a high level of annual growth had not been registered since September 2007, before the financial crisis started. According to the Catalan Finance Ministry, the minor fall off in growth registered between April and June compared to the growth rate from January to March is due to the "extraordinary" 1.1% growth rate of the first quarter. The Ministry stressed that 0.9% growth is still a very positive rate and does not break the trend of the economic recovery, on the contrary proving its strength.