gdp

According to a report published on Thursday by Barcelona's Chamber of Commerce, the Spanish Government's investment in infrastructure in Catalonia has dropped by 50% in the last 10 years, while it has been reduced by 25% throughout the rest of Spain in the same period. The President of the business association, Miquel Valls, stated that this reduction represents "a break"in the Catalan economy's growth, which could be in a better position to speed up the economic recovery. The report takes into account the executed investment made by the Spanish Government and its public companies in areas such as airports, high-speed railway or harbours. In 2006, the Spanish Parliament recognised "a historical" lack of investment in Catalonia when it approved the Catalan Statute of Autonomy and set a minimum investment percentage share to be made in Catalonia to compensate this in the next 7 years. This share was never respected.

''The recovery has come and has come to stay,'' according to Salvador Guillermo, Director of the Economy of Catalonia's main association of business-owners, Foment del Treball. Guillermo, who coordinated the report published on Tuesday, said that the analysis of economic data confirms that the positive trends have been occurring a month earlier in Catalonia than in the rest of Spain, "which means that recovery is more entrenched'' in Catalonia. The agents of this recovery are internal demand (consumption and investment) and the fast pace of exports in Catalonia.

The Catalan Government issued on Thursday its own calculation of the so-called fiscal balances with the latest data available, which is from 2011. In that year, Catalans funded services and infrastructure in the rest of Spain for €15 billion, equivalent to 7.7% of Catalonia's GDP or €2,055 per citizen, using the monetary flow formula. Using the tax-benefit method, Catalonia contributed €11.1 billion, equivalent to 5.7% of its GDP. The two methods are "complementary", as the Catalan Finance Minister, Andreu Mas-Colell stated, although the first one makes less assumptions and is closer to reality in times of economic crisis and high unemployment. "Catalonia is a net and generous contributor" to the whole of Spain, he said. In fact, the figures for 2011 confirm Catalonia's "sustained" negative "fiscal balance" for the 1986-2011 period, with an average 8.0% fiscal deficit. This has been for decades a very sensitive issue in Catalan and Spanish politics, and even more considering the self-determination debate.

Throughout this week the Fira de Barcelona's Montjuic exhibition venue in the Catalan capital is transformed into a business fair for start-ups and entrepreneurs. The BizBarcelona event takes place on Wednesday the 4^th and Thursday the 5^th of June and is the second edition of this innovative business fair. The event serves several purposes and contains as many as six different areas including e-commerce, the financial markets, exports, franchises, business consulting as well as cooperation and networking. The event offers various opportunities for established and future entrepreneurs. BizBarcelona is a welcome initiative. First quarter financial reports revealed a decrease in bankruptcy proceedings, and with a high unemployment rate in Catalonia and Spain it is hoped that these new companies can create jobs.

The Catalan economy grew by 0.4% in the first quarter of 2014, which means that GDP has been increasing for the last 4 consecutive quarters, leaving recession far behind, according to an early estimate published on Monday by Catalonia’s Statistics Institute (Idescat) and the Catalan Ministry of the Economy and Knowledge. Furthermore, between March 2013 and March 2014, Catalonia’s economy grew by 0.8%. In the second quarter of 2013 it registered a quarterly growth of 0.1%; in the third it also posted a 0.1% quarterly growth; between October and December, it increased by 0,2%; and now, between January and March, it grew by 0.4%. The services sector has been the main engine behind this positive trend; in the last 12 months it grew by 1.4%.

The Government of Extremadura, a region bordering Portugal, presented a study comparing its contributions to the rest of Spain with those of the other Autonomous Communities, particularly focusing on Catalonia. The main thrust of the report was that Catalonia receives the highest amount of money from the Spanish Government, which goes against absolutely all the previous studies that have established that Catalan taxes fund services, investments and infrastructure in the rest of Spain. The Catalan Finance Minister, Andreu Mas-Colell, characterised “the political document” presented by Extremadura’s Government as a “complete nonsense”. Mas-Colell, who was Professor of Economics at Berkley and Harvard from 1972 to 1995, said that the report lacked rigour and was not a technical work. The next day Extremadura’s President, José Antonio Monago, stated that Catalonia is “a privileged territory” and questioned whether it could repay its debt.

The Catalan Minister for the Presidency and Spokesperson for the Executive, Francesc Homs, warned that “if a political solution cannot be reached” to keep Catalonia within the EU if it becomes independent from Spain, it would be “the end of Europe as a model for democratic and peaceful integration of the different peoples that form it”. On Monday, in a debate on ‘Catalonia’s political process’ held at the University of Lisbon’s Faculty of Law, Homs highlighted the fact that if EU Treaties had been interpreted “literally”, the financial bailouts for Spain, Portugal, Ireland and Greece would not have been possible. However, in this case, the EU reacted “with common sense” and for “the general interest”. Therefore, “since the EU is a project of peace and democracy, a political solution [for Catalonia] will be found, as the EU has ever done in all situations”, he stated.

The President of Barcelona Chamber of Commerce, Miquel Valls, stated on Thursday that the independence process was not affecting Catalonia’s economic recovery. During a press conference, Valls emphasised that such a statement was based on concrete “facts”. He stressed that Catalonia had tripled the amount of incoming foreign investment compared to the Spanish average, and that the Catalan economy had also registered better figures in enterprise creation and business confidence, employment and other indicators showing an economic recovery According to the report on conjecture and economic perspectives, the Catalan GDP grew by 0.7% during the fourth quarter of 2013, whereas the Spanish GDP dropped by 0.1%. Valls also recalled that the consultation vote on the political future of Catalonia would involve “citizens and not businesses”, thus responding to the employers who recently voiced their opposition to Catalonia’s independence.

The Catalan economy has continued on a positive trend during the fourth quarter of 2013, also speeding up the recovery process. According to data released on Friday by the Catalan Ministry of Economy and Knowledge alongside the Catalan Institute of Statistics (Idescat), Catalonia’s GDP grew by 0.4% in the fourth quarter of 2013, while the Spanish average stood at 0.3%. In the whole year, the Catalan GDP has decreased by 0.6 %, while in 2012 it dropped by 1.3%. The continued good results in exports due to the increasing external demand and the improvement of the domestic demand have driven the economy forward.

In 2013, Catalonia was the first tourist destination in Spain. It received15.6 million foreign visitors, meaning 25.7 % of the total number of international tourists in Spain (one in four). The figure represents an 8% increase over the previous year. The Balearic Islands were in second place, welcoming over 11 million tourists (18.3%), a 7.2% increase. The Catalan Minister for Business and Employment, Felip Puig, stressed that tourist spending also increased significantly, generating €14.2 billion in 2013, that is to say 14% more than the previous year. At Spanish level, the number of foreign visitors reached a new record: Spain welcomed 60.6 million tourists in 2013, making it the third favourite travel destination in the world, behind France and the United States.

The Catalan Government will file several formal demands for payment of the €2.02 billion the Spanish Government legally owes Catalonia from the 2008-2013 period. The money represents 1% of Catalonia’s GDP or 7% of the Catalan Government’s budget. According to the Statute of Autonomy, which was approved by the Spanish Parliament and came into force in 2006, the Spanish Government was obliged to invest a percentage equal to or higher than Catalonia’s share of Spain’s GDP between 2007 and 2013 in order to compensate for an historical lack of infrastructure investment. If it was not doing so, the Spanish Executive had to compensate Catalonia financially. The measure was adopted after exhaustive negotiations and was essential to the approval of this law by the Catalan people through a binding referendum. However, the Spanish Government never honoured it. Madrid compensated Catalonia for the lack of investment in 2007, but not for the remaining years.

The Catalan Government has forecasted a 0.9% economic growth for 2014 in its budget proposal for next year, leaving behind the recession of 2012 (-1.2%) and 2013 (-1.1%). The positive figures are mostly due to the strength of the export sector – which will continue to improve its results. The main factor slowing down growth will be the internal demand, which will continue to decrease although it will do so at a lower pace. In addition, the Catalan Executive believes the unemployment rate will decrease and reach 23.1% by the end of the year. It is expected 2013 will end with a 23.7% unemployment rate, higher than the 22.6% rate registered at the end of 2012.

According to the Catalan Institute of Statistics (Idescat), Catalonia’s economy grew by 0.1% between July and September. For the first time in 9 quarters, the Catalan economy is growing again, leaving behind the technical recession. However, in annual terms, Catalonia’s GDP has not recovered yet and at the end of September it posted a 0.6% decrease on data from September 2012. Besides, the Spanish Institute of Statistics (INE) confirmed that the Spanish Economy also grew by 0.1% in the third quarter of the year, a figure which had been advanced last week by the Bank of Spain. In annual terms, the Spanish economy dropped by 1.2% compared to data from September 2012.

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%.

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.