economic recovery

Exports from Catalonia increased by 3.1% in 2014, reaching €60.2 billion, meaning that more than 30% of the Catalan GDP is sold outside of Spain. Furthermore, Catalan exports grew more than those of Spain as a whole, which increased by 2.5% last year, reaching €240 billion. This means that 25.1% of all Spain’s exports come from Catalonia’s economy, some way ahead of the Madrid region, which produces 11.7% of Spain’s total exports. In addition, the growth rate of Catalan exports was much higher than the Eurozone average (exports from which grew by 1.8%) and also higher than that of EU Member States such as France (-0.2%), UK (-11.1%) and Italy (+2%). The figures posted this Wednesday confirm the good health of Catalonia’s export sector and the high degree of internationalisation of its economy.

For the first time in seven years, the number of houses and flats being built in Catalonia has increased. The figures for 2014 show that between 4,300 and 4,500 new properties have appeared on the market after seven years of decline. According to Lluís Marsà, President of the Promoters Association of Barcelona, the housing market is recovering due to the improving economy. Marsà says there is still one big obstacle remaining to consolidate the recovery of the sector: “The lack of bank financing which keeps people from purchasing new housing.” While this is a positive development, the housing market has still a long way to go. According to Marsà, “it will probably take 3 or 4 years to fully recover.”

Another positive figure has emerged to confirm the economic recovery after years of crisis. Catalonia’s GDP grew by 1.2% over the course of 2014, which are the best figures since 2007, before the financial crisis, according to early data released on Thursday by the Catalan Statistics Institute (Idescat) and the Catalan Finance Ministry. The figure is higher than the 0.9% economic growth foreseen in the Catalan Government’s budget for 2014 (approved in late 2013) but is lower than an early forecast made in March, when a 1.5% growth was predicted. Besides this growth in the Catalan economy, in Spain as a whole, the economy grew by 1.4%, according to early data released by the Spanish Statistics Institute (INE). Furthermore, the Catalan economy grew by 0.4% in the last quarter of 2014 compared to September figures and by 1.5% in annual terms. In the first, second, and third quarters it grew by 0.5%, 0.4%, and 0.3% respectively (in quarterly terms).

The Catalan Government’s Deputy Minister for External Affairs, Roger Albinyana, announced the Executive’s aim to have a network of “about 50 delegations” throughout the world, representing Catalonia’s political, business and cultural interests abroad. The Catalan Government currently has 7 delegations abroad, after the new representations in Rome and Vienna start to work on Monday, when the representatives were appointed. The 5 others are located in Brussels, London, Paris, Berlin and Washington. In the coming “months and years”, the Catalan Government will continue to open new delegations. Regardless of the hypothetical independence from Spain, the Catalan Executive already has the powers to have its own External Action policy, recognised by the Catalan Statute of Autonomy from 2006, although with many limitations.

For the first time in 7 years, in 2014 Catalan shops increased their overall sales figures compared to the previous year, growing by 1.4%. Furthermore, the figures are even more positive looking at the sales in December, which grew by 7.4% compared to the same month in 2013, according to data released on Thursday by the Spanish Statistics Institute (INE). The Catalan figures are better than the Spanish average, both for 2014’s overall figures and for those from December. In Spain as a whole, retail increased by 0.9% last year and by 5.4% in December. The worst year for Catalonia’s retail sector was 2011, when sales dropped by 6.2% in annual terms. Other years, they stagnated, such as in 2010. 

The President of the Catalan Government, Artur Mas, assessed on Tuesday the Executive’s work during 2014, which he found to be “positive” overall, although he admitted there are still many people in great need and many social and economic challenges ahead. Referring to the current debate on whether to call early elections transformed into a ‘de facto’ referendum on independence from Spain, Mas promised immediate decisions to be announced on Thursday. Before taking the definitive decision and after weeks of admitted “confusion”, the Catalan President wants to hold a last round of talks with the main civil society organisations supporting independence and the left-wing pro-independence party ERC – with whom the governing centre-right pro-Catalan State coalition CiU has shared a parliamentary stability agreement for the last 2 years. “I will not slack” in the self-determination process, Mas stated.

“Unity gives us strength as a country”, stated Artur Mas, President of the Catalan Government, in the New Year’s official speech, which is broadcast annually on 30 December. Mas emphasised that “the [Spanish] State wants us to be divided”, because this way “we are weaker and more vulnerable”. The Catalan President makes this statement in the middle of the talks he is carrying out with the opposition left-wing independence party ERC in order to decide whether to run together in early elections that should be transformed into a ‘de facto’ independence referendum. However, the left-wing ERC is reluctant to run with Mas and members of the centre-right pro-Catalan State coalition CiU, which he leads. In his address, Mas also spoke in praise of the symbolic independence vote held on 9 November, which was “an exercise of democracy”, which “should call for dialogue and negotiation, instead of criminal prosecutions”.

The Catalan economy grew by 1.5% at the end of the 3^rd quarter of 2014 in annual terms, while at the end of June it was growing at a rate of 1.3%. Catalonia has therefore accumulated 4 consecutive quarters with positive annual economic growth. However, although the economic recovery has slowed somewhat, growth remains positive, as other figures show. In quarterly terms, Catalonia’s GDP increased by 0.3% between July and September, which represents a drop from the 0.5% growth registered for April – June and also for January – March. Meanwhile, in Spain as a whole, the economy grew by 1.6% in annual terms at the end of September and by 0.5% in quarterly terms. The European Union is posting the same growth rates as Catalonia: 1.5% in annual terms and 0.3% in quarterly figures.

The President of the Left-Wing Catalan Independence Party ERC, Oriol Junqueras, has explained his own road map to allow citizens to vote on independence from Spain and build a new state. Junqueras proposed running in immediate early elections through different pro-independence lists with shared elements and opened to independents, in order to respect diversity. The ERC leader differed from the proposal of running through a single electoral list made by the President of the Catalan Government and leader of the centre-right pro-Catalan State coalition CiU, Artur Mas. Junqueras insisted on the need to answer to the social and economic concerns of many citizens in addition to those about independence. Should they altogether obtain a majority, the different pro-independence candidatures should form a national unity government and start building the new state from day one. He particularly emphasised the need to include those who did not voted for independence in the constituent process, which should be finally ratified in a referendum.

The Catalan economy’s indicators are posting positive figures and the research department of the BBVA bank has reviewed its growth forecast for Catalonia for the current and the next years. According to the report issued on Thursday by the BBVA, the Catalan economy will grow by 1.3% in 2014 and by 1.8% in 2015, which are higher rates than those initially predicted. On top of this, 140,000 new jobs will be created in those two years, which represents a 4.3% employment growth. In addition, it puts an end to the negative trend that destroyed 17.3% of the existing jobs between 2008 and 2013. The BBVA also praises “the very significant effort” made by the Catalan Government to reduce public deficit in the last few years, although they will not be enough to meet the strict deficit objectives for 2014 and 2015, unilaterally imposed by the Spanish Government.

According to figures from the Spanish Institute of Statistics, prices in Catalonia have risen from -0.3% in Octoeber 2013 to an annual inflation rate of 0.1% in October this year, the same as that of September. Inflation has been kept low by falling prices of electricity, while the rising cost of fresh food has prevented negative inflation. In Spain, prices have risen from a -0.6% annual inflation registered 12 months ago to a negative inflation of -0.1%, accumulating four consecutive months of negative rates. The prices of fresh food and non-alcoholic beverages influenced the most the annual price increase in Catalonia, and thus offset the low performance in other sectors that are contributing to keep annual inflation close to zero in Catalonia, and in the negative for the last four months in the whole of Spain.

According to official data released by the Catalan Ministry of Economics and the Statistical Institute of Catalonia (Idescat), the Catalan economy grew by 0.5% between and July and September 2014, the latest in six consecutive quarters of positive economic growth. A signal that the recession is far left behind. The whole of Spain also grew by 0.5% in the same 3 months. In annual terms, Catalonia's GDP has grown by 1.8%, mainly thanks to the boost by the services sector,which has demonstrated an annual growth of 2.4%. The sector of industry grew by 1.5% and those of construction and agriculture decreased by -2.6% and -1% respectively. Idescat’s previous predictions for 2014 quarters has been reviewed: the 0.5% initially estimated for the first quarter increased to 0.7%, while the 0.6% for the second quarter dropped to 0.5%.

Figures released by the Barcelona Chamber of Commerce on Monday showed that the economy of Catalonia is set to grow by 1.6% in 2014 and 2.1% in 2015. The Chamber also predicted that by 2015, there will be a 2% rise in Spain’s GDP and 1.4% in that of the Eurozone countries average. According to the President of the Chamber, Miquel Valls, the recovery of Catalan and Spanish economies is "solid", but he stressed that the "austerity in wages" must be maintained. This report comes after the success of all Catalan banks passing the stress tests issued by the European Banking Authority and the European Central Bank, which 25 banks across Europe failed. Related economic news is that the unemployment figures released for third quarter of 2014 set Catalonia’s rate at 19.1% and Spain’s at 23.67%.

Spain's unemployment rate at the end of the third quarter stands at 23.67%, according to the latest Active Population Survey (EPA). The unemployment rate for Catalonia has fallen below 20% for the first time in the last 3 years and is set at 19.10%. The number of unemployed people in Catalonia has dropped by 44,400 in the third quarter of 2014, a decrease of 5.76% compared to the previous quarter. This is the biggest reduction since at least 2002, when the Spain's Statistical Institute began the series. Thanks to the creation of 69,100 new jobs in Catalonia over the last 12 months, there are now 34,800 more people employed in the third quarter. This makes Catalonia have the second highest unemployment drop in Spain, second only to Madrid Region (-48,200 people). The Catalan Minister for Business and Employment, Felip Puig, has called the figures are "encouraging" and "hopeful", although a 19.1% rate is still "very high".

Pimec and Foment, Catalonia’s largest employers’ associations, have expressed outrage at the Spanish Government’s budget proposal for 2015 and its planned investment in Catalonia. Both Foment, which groups the largest employers, and Pimec, who represents small and medium-sized enterprises, have criticised that the Spanish Government has allocated to Catalonia only 9.5% of Spain’s total investment, despite it contributing 19% of the country's GDP and having 16% of its population. Spokespersons for both organisations have said the shockingly low budget is at odds with Catalonia’s high productivity and represents "a missed opportunity", both for economic growth and political dialogue, considering the independence debate. According to Ramon Adell, from Foment, Catalonia "as the engine of recovery, deserves a greater investment in infrastructure."