Exports will drive Catalan economy to 0.9% growth in 2011
The Catalan Ministry of Economy and Knowledge has released its macroeconomic outlook for 2011. At the end of the current year, the unemployment rate will be 18%, up from 2010.
Barcelona (ACN).- Catalonia’s GDP will increase by 0.9% over 2011, according to data released by the Catalan Ministry of Economy and Knowledge. In 2010, the Catalan economy only grew 0.1% but broke the 4.2% contraction in 2009. Growth is dependent on exports, which are set to increase by 6.2% over this year. The President of the Catalan Government Artur Mas sees the outlook as “a change of trend” that will help the economy “take off”. However, the Catalan President, who was Catalan Minister for Economy ten years ago, explained that this growth “will not be enough” for employment creation. In this sense, the economic forecast predicts an unemployment rate of 18% at the end of 2011, two tenths higher than 2010.
The Catalan Government’s macroeconomic outlook foresees a stabilisation of internal consumption. Therefore it will not be one of the economic recovery’s engines. Despite the 1.1% increase in family consumption in 2011, it will not be enough to compensate for the 1.3% drop in public administration expenditures. The latter increased by 0.2% in 2010.
Private company investments increase compared to last year’s levels, but they continue to be on the negative side. The Catalan Government’s analysis states that corporate investments will decrease by 2% in 2011. The drop is mainly due to the construction sector, which will continue its contraction with an investment rate of -6.1%. Even the predicted 2.1% increase in industrial sector investments will not make up for the building industry’s contraction.
The true engine of Catalonia’s economic recovery lies in exports, which will grow by 6.2% in 2011.
Unemployment grows
Despite some good indicators, most are still quite weak, with a positive trend only starting to show now. This means that employment will still not recover. The end of 2011 will see 6,300 less jobs compared to those at the end of 2010, at an unemployment rate of 18% compared to 17.8% in 2010. It is not all bad news however. At least, 2011 will end with an unemployment rate that is lower than the current figure for the end of March, at 19.1%.