GDP to grow 2.9% this year says government

The government has forecast that GDP in Catalonia will grow 2.9% throughout this year, and 2.5% in 2019.

At the presentation of the annual economic report for 2017 on Thursday, the secretary general of Economy and Finance, Albert Castellanos, pointed out that this forecast for growth is higher than in Spain and the rest of the Eurozone.

Political tensions in 2017

The economy has weathered 2017’s political storm well. According to the figures, a total of 2,536 companies moved their headquarters outside of Catalonia last year when tensions between the Spanish and Catalan administrations reached crisis point. This had a “relative” impact on the economy, stated Castellanos as production and workforces remained in the country. 

In this vein, Catalonia’s vice-president and Minister of Economy, Pere Aragonés demanded “explanations” from those who made “catastrophic forecasts” last year. Aragonés stated that these “conditioned the decisions of some economic agents,” which could have had a detrimental effect on the Catalan economy.

Notwithstanding, according to Aragones, it was "strength" and diversification" that allowed the Catalan economy "to withstand the pressures" of the political situation. "The bases of the economy are strong enough to withstand any kind of pressure," he said. The Minister of Economy added that the application of Article 155, which stripped the country of its self-rule, prevented Catalan institutions from "participating in necessary economic revitalization.”

The current political backdrop, however, “presents many more reasons for tranquillity” as there is “certain political and economic stability,” pointed out the secretary general of economy. 

Stable growth

Although a slow-down in the Catalan economy was evident, growth is currently more “stable” and “sustainable” now, according to the ministry. In this sense, Castellanos pointed out that growth has been consolidating over the years, and is not a one-off spike.

The report indicates that industry has recovered ground in the economy since 2014, and is becoming a “leading sector” in economic growth. Indeed, according to another report by the Chamber of Commerce released earlier this month, industry accounted for 22.1% of GDP in 2017. This was the highest level recorded since 2008. Science and the ICT are other fields leading the economic recovery after the crisis. 

Castellanos highlighted that a “change of pattern” in the tourism sector has been observed, as it has become more “focussed on quality than on quantity.” Despite a drop in the number of tourists in the final quarter of 2017, he also pointed out that evolution in the sector  is “positive.”

The August terrorist attacks as well as “images of police violence” during the independence referendum also had an impact and caused a decrease in the number of tourists. This was “reversed” in the first months of this year, said Casttellanos.

Challenges ahead

Despite this, the vice-president stressed that one of the main challenges faced by the government is to improve the quality of employment in general, and combat high rates of part-time work and low wages, as well as “reducing poverty rates.”