Recovery of Catalan economy is ahead of that of Spain, employer association report finds

Barcelona (ACN).-''The recovery has come and has come to stay,'' according to Salvador Guillermo, Director of the Economy of Catalonia's main association of business-owners, Foment del Treball. Guillermo, who coordinated the report published on Tuesday, said that the analysis of economic data confirms that the positive trends have been occurring a month earlier in Catalonia than in the rest of Spain, "which means that recovery is more entrenched'' in Catalonia. The agents of this recovery are internal demand (consumption and investment) and the fast pace of exports in Catalonia, which the report indicates has more momentum than the rest of Spain.

The economy is recovering at a good pace and, unless "something comes and destroys it" (akin to the Israel-Palestine or Russia-Ukraine conflicts and their potential impact on exports), the growth forecasts for the Catalan and Spanish economy will not fall short and might even be surpassed, according to Salvador Guillermo.  

The employers’ report highlighted the importance of internal and external demand in Catalonia, and has found that this Autonomous Community has more momentum than the rest of Spain.

The optimism of Foment's Secretary General and Director of the Economy is based on the fact that the current pace of recovery will increase as the Spanish Government’s tax reforms take effect on consumption, emphasised Guillermo. He also highlighted the positive effect that the measures deployed by the European Central Bank to help restore credit to businesses will have, particularly on smaller businesses.

So far, the figures up to April 2014 indicate that, while the stock of credit or loans deposited in Spanish banks is depleting month after month because of the effects of deleveraging households and business, new business credit data to companies of less than €1 million increased by 2.8%, which, according to Guillermo, means that the loans have started coming to SMEs.

In addition to the Spanish Government's tax reform, which in next January will leave taxpayers with more in their pockets, and the ECB's policies to foster loans to the private sector and improve euro-dollar parity, it is the increase in exports and the role of the construction sector that have been most promising. The high levels of exports and a construction sector that will stop decreasing will greatly help to improve the overall GDP of both the Spanish and Catalan economies.

Catalonia's independence process has no effect on the economy

Taking questions from journalists, Salvador Guillermo insisted once again that the self-determination process taking place in Catalonia “has neither a positive nor negative effect” on the economic recovery in Catalonia.

Regarding unemployment, Guillermo recalled that this is currently the first time since 2011 that net employment growth takes place within the registered unemployment lists. Guillermo stressed that employment levels were improving at a greater pace in Catalonia than in the rest of Spain. While in Catalonia, registered unemployed fell 7.6% year on year in June, Spain by comparison registered a fall of 6.6%.

Salvador Guillermo and Joan Pujol nonetheless emphasised that the improvement of the economy will not mean any relaxation of government policy with regards to structural reforms, and insisted that there is still more to be done in terms of regulatory and market reform to boost free competition.