Business

Autonomous Communities in Spain should have “greater power to mobilise their own revenues”. This is one of the main pieces of advice the International Monetary Fund (IMF) gives in its monitoring report of the Spanish economy. The text stresses that “without reforms”, the Spanish regional financing framework remains “a risk for the achievement of fiscal targets”. “Reforms should aim to improve regions’ incentives to comply with fiscal targets while accounting for their different economic capacities”, adds the report. In this regard, it proposes a “more automatic and stricter enforcement of targets” and giving the regions greater autonomy to mobilise their incomes. Furthermore, the IMF urges Spain to reduce value-added tax exemptions and excise duties and environmental levies.

The winter season in the clothing and footwear industry, as well as an increase in the price of electricity, led to a 0.3% increase in the price index during November in comparison to the previous month and brought the annual inflation rate in November in Catalonia to 1%. This is the highest annual rate recorded in Catalonia since August 2013, when the figure reached 1.7%. However, the evolution of annual inflation, in minimum rates, is still being restrained by fuel prices, which fell in November, in comparison to the stability that was recorded during the same month last year. According to data released this Tuesday by the Spanish National Institute of Statistics (INE), the annual inflation rate in Catalonia is the highest in Spain, followed by Navarra (0.9%), Asturias (0.8%) and the Canary Islands (0.8%).

Unemployment in Catalonia increased by 4,573 people in November and reached 462,969 individuals registered on the lists of the Catalan Public Employment Service (SOC). According to the data released by the Spanish Employment Ministry and Social Security, unemployment saw a 1% rise in monthly terms. This increase in jobseekers is the highest registered in November since 2013. The Catalan Secretary General of Employment, Social Affairs and Families, Josep Ginesta, warned that the reduction of unemployment in Catalonia is “slowing down” due to the dependence on seasonal economic sectors. In this vein, he proposed the reconversion and reindustrialisation of Catalonia to create “more and better” jobs.  In annual terms, registered unemployment has decreased, with 58,681 less jobseekers, an 11.25% drop. 

The Catalan Vice President and Minister for Economy and Tax Office, Oriol Junqueras, voted against the new regional deficit target of 0.6% of GDP agreed between the Conservative People’s Party (PP) and the Spanish Socialists (PSOE). During the Council on Fiscal and Financial Policies (CPFF, going by its Catalan initials) on Thursday evening, Junqueras said that the target is “absolutely far from what citizens need and deserve”. The Catalan Government had asked for a 1.18% deficit target for 2017, but the Autonomous Communities’ limits were set instead at 0.6% for next year, 0.3% for 2018 and 0% of GDP for 2019. They were accepted despite the opposition of Catalonia, the Balearic Islands and Valencia. The communities led by the PSOE abstained. The Spanish Finance Minister, Cristóbal Montoro, celebrated the fact that only three territories voted against the measure, saying there was a “good atmosphere” at the meeting.

There has been a recent turn in British investment in Catalonia. While Foreign Direct Investment (FDI) from the United Kingdom in the region was on a downward trend between 2013 and last June, the situation has reversed and Catalonia currently accounts for 4,4% of British FDI in Spain. Indeed, Catalonia is the third territory of Spain in terms of volume of British FDI. Ahead of Catalonia, stand only Madrid and the Basque Country, which received, respectively, €3,258 and €828 million from the UK between 2013 and last June. In the same period, Catalonia received a gross flow of €546 million, according to the Barometer on the Climate and Perspectives for British Investment in Spain and Catalonia, a report that analyses the evolution of direct investment from British companies in Spain.

Norwegian Airlines will double its workforce at Barcelona Airport, from the current 354 people to 755 in August 2017. The announcement was made this Monday by the Vice President of Human Resources of the company, Jan Dahm-Simonsen, during the press conference on the expansion of the airline offices at the installation in Prat de Llobregat. The 755 jobs Norwegian Airlines will have at the company headquarters in Southern Europe, in Barcelona, will include administrative, flight and ground assistance personnel. The expansion of staff responds partially to the rise in operations of the airline at Barcelona Airport, which will connect the city with Los Angeles, San Francisco, New York and Miami from next summer. 

Catalan exports to Cuba grew by 50% in 2015, reaching €294 million. With this in mind, the Catalan Minister for Business and Knowledge, Jordi Baiget, and the director of the centre for the promotion of foreign trade ProCuba, Roberto Verrier, signed on Thursday in Havana an agreement that seeks to strengthen trade relations. ProCuba, under the Cuban Ministry for Foreign Trade and Foreign Investment, works to promote the internationalisation of the industry of the country. According to the agreement, Cuba will now provide Catalonia with information on the investment opportunities in the region in order to promote the arrival of new Catalan businesses to the island. Baiget, who is participating in a trade mission to Panama and Cuba organised by the Port of Barcelona and Acció, the Catalan Public competitiveness and internationalisation agency, stated that the measure was “really important”. It implies “direct capacity for dialogue” with the Cuban body responsible for foreign investment, he added.

Barcelona and Seoul will be connected through three direct flights per week from the 28th of April 2017. The Catalan Minister for Business and Knowledge, Jordi Baiget, announced this Wednesday that next year Korean Air, the largest airline in South Korea, will operate three flights - on Monday, Wednesday and Thursday - with capacity for 248 passengers each. The company currently operates flights to 129 destinations in 46 countries and in 2015 registered around 25 million passengers. Baiget detailed that the negotiation process to achieve an agreement started two years ago, on a trade mission and institutional trip of the Catalan Government to South Korea, and explained that the airline will extend the frequency to four days in the future “if things work well”.  

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. 

Catalonia and Japan have renewed their business, cultural, touristic and research ties for the next three years, through the so-called ‘Japan Plan 2016-2019’. The Government presented the agreement, approved last 25^th of October, on Monday and explained that it aims at boosting business promotion, investment attraction, tourism cooperation, student mobility and cultural and gastronomic exchange. While the presentation of the Plan was taking place on Monday morning in Barcelona, a mission organised by the Port of Barcelona and Acció, the Catalan Public competitiveness and internationalisation agency, was in Panama trying to improve the trade relationship with the Central America region. The Catalan Minister for Business and Knowledge, Jordi Baiget, and the Catalan Minister for Planning and Sustainability, Josep Rull, accompanied fifty Catalan companies on their visit to Panama and Cuba, where they held 300 meetings with local businesses.  

Exports from companies based in Catalonia reached €48.58 billion during the first 9 months of 2016, a 2.1% increase compared to the same period last year. According to the Spanish Ministry for Economy and Competitiveness, this figure sets a new historic high for Catalonia’s export sector, which has been growing strongly over the last few years. Moreover, in September Catalan exports were worth €5.7 billion, which is the highest figure for this month since the beginning of the historic series, in 2000. The sectors that contributed the most to the positive export figures were the chemical sector, which concentrated 60.8% of total exports, followed by equipment goods and the automotive sector. On the other hand, Catalonia’s trade deficit between January and September rose by 0.5% in comparison to the same period in 2015 and totalled €9.2 billion. 

According to a study released this Thursday by the Catalan Ministry for Economy and Tax Office, the “autonomic framework” does not leave “enough room” to cope with poverty and inequality in Catalonia. ‘Economy note 103: Analysis and tools to tackle poverty and inequality’, a report that includes 19 extensive articles from around 30 experts, technicians and academics, stresses that the scope of the Catalan Government’s public policies is limited by “the restrictions on powers and availability of income of the current autonomic framework”. In the same vein, Catalan Vice President and Catalan Minister for Economy and Tax Office, Oriol Junqueras, said that this situation has forced him to prepare a budget for next year “that is neither the one Catalans deserve nor what they need” because it does not correspond to the “economic and fiscal effort” made by the citizens.

Autonomous vehicles or a device capable of detecting free parking spaces, intelligent lights that monitor traffic, headphones designed to facilitate the mobility of blind people in cities and charging spaces for mobile phones that take advantage of the structure of the old telephone booths. These are some of the technological innovations that visitors can see at the sixth edition of the Smart City Expo World Congress (SCEWC), taking place between this Tuesday and next Thursday. The event is the showcase of smart cities and this year celebrates its largest edition yet, with 600 cities participating, 576 exhibitors, 412 speakers and a forecast for 14,000 visitors. Along with this event, the Gran Via Exhibition Centre is hosting three more: the Circular Economy Summit, iWater and European Utility Week, which turns Barcelona into the world capital of sustainable development.

Prices went up by 1% in October, in comparison to September, and left the annual inflation rate in Catalonia at 0.9%, according to the definitive data released on Tuesday by the Spanish National Institute of Statistics (INE). The products that influenced the increase in prices most were the clothing and footwear sector, due to the start of the winter season, and the price of electricity and fuel – both rose in October this year, while they decreased in the same month of 2015. The inflation rate at the end of October is the highest registered since August 2013, when it reached 1.7%, and confirms an upward trend that has now lasted for three months. 

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.