Catalan economy to grow 2.1% this year, predicts BBVA bank
New study suggests uncertain political situation in Catalonia could slow growth and job creation
The Catalan economy is set to grow by 2.1% in 2018, and 2% in 2019, says a new study from the BBVA banking group. The report puts the growth forecasts for the Catalan economy slightly below the 2.5% and 2.3% predicted for the Spanish economy as a whole. The difference in the figures is to an extent attributed to the political uncertainty in Catalonia.
As the Catalan economy is expected to grow slightly less, the report also predicts that fewer jobs will be created. Compared to the 215,000 jobs created in the 2016-2017 period, the study forecasts 136,000 new jobs will be created in 2018-2019, with the unemployment rate standing at 11.8% in 2018 and dropping to 10.5% in 2019.
The report suggests that the behavior of the Spanish economy as a whole, as well as by Catalonia, was in line with favorable predictions in the final quarter of 2017. However, it claims that the figures for the end of last year show the effects of the summer terrorist attacks in Catalonia and the political uncertainty that came later.
The BBVA report expects this downturn to continue into this year, meaning economic growth in Catalonia -and by extension neighboring Valencia and Aragon- will be below that of Spain as a whole.
Looking ahead to 2019, the report reserves judgement to what extent the political situation in Catalonia will continue to have an influence. The indicators for consumption and employment will remain volatile for Spain as a whole, says the report, while the impact on tourism will only continue to be seen in Catalonia, albeit of “limited intensity.”