Political crisis won’t have 'substantial impact' on economy

The Association of Economists in Catalonia (CEC in Catalan) foresees that the political conflict between Catalonia and Spain will have no “substantial impact” on the Catalan economy in 2018, if it is carried out through “the usual channels.”

On Tuesday, the head of CEC, Joan B. Casas, pointed out that if the political situation returned to a more “classic level of parliamentary debate, tension will be reduced” as well as “the impact on more sensitive sectors.” Casas also highlighted that the crisis “will not disappear.”

However, Casas also asserted that if “the conflict is prolonged with physically violent elements,” then it will make an impact on the economy with the halting of “investments and projects.” In this sense, the head of CEC believes that the forming of a government “will help” the completion of objectives in terms of the growth of the Catalan economy, and “limit” the impact on certain sectors.

Some sectors hit harder

Casas also recalled how the political situation in the country hit “heavily” during the final quarter of 2017, but that the effects were “disparate” with regards to each sector. While the hotel and trade sectors were affected most, Catalan exports “continued to rise,” for example. According to Casas, the Catalan economy is “quite diversified, it has very powerful active elements.”

The association is optimistic about the economic prospects for Catalonia, and Spain as a whole, in 2018, stating that they are “positive” and “in line” with global growth. “This does not mean that it is not subject to a series of risks that can jeopardize these forecasts,” Casas explained.

No repeat shocks

The president of Banc Sabadell, which closed 2017 with a net profit of around 800 million euros, also expressed his confidence that there will be no repeat of the “shock of October 1,” when millions of Catalans took to the streets to vote in the referendum, many confronted by Spanish police violence. In the aftermath, many companies moved their headquarters away outside of Catalonia for fear of the repercussions of the ongoing political crisis between the Catalan and Spanish governments.

On Tuesday, Josep Oliu, who has been president of the bank since 1999, also stated how “normality” will return in the coming months. Echoing the CEC’s forecast, Oliu also assured reporters that the current political instability in Catalonia has not had no significant short term impact on the Catalan or Spanish economies.