The Catalan economy contracted by 1.3% in 2012, while the Spanish economy decreased by 1.8%

Barcelona (ACN).- The economic recession was more severe in the last quarter of 2012, which meant that the Catalan economy plummeted by 0.6% at the end of December compared to 3 months ago, according to data released on Thursday by the Catalan Finance Ministry and Catalan Statistics Institute (Idescat). The fourth quarter’s poor figures made the Catalan economy contract by 1.3% over the whole of 2012. In 2011, it also decreased but at a slower pace, dropping by 0.7%. For the whole of Spain, the economy plummeted by 1.8% in 2012. In addition, it dropped by 0.7% over the last quarter of the year, compared to the figures from September 2012. The main reason behind the last quarter’s drop is the decrease in consumption by families, compared to the purchases made in the third quarter. Between July and September 2012, family purchases increased in order to avoid the VAT increase approved by the Spanish Government, which came into force on the 1^st of September.

According to data released on Thursday by the Catalan Finance Ministry and Catalan Statistics Institute (Idescat), Catalonia’s GDP dropped by 0.6% over the last quarter of 2012. In the third quarter, it decreased by 0.3%. The figures of the third quarter are highly influenced by the high consumption levels aiming to avoid September’s VAT increase.

The Catalan export sector affected by the global recession

The decrease of the Catalan economy is greatly influence by the international context and the economic slowdown of the second half of 2012. In fact, now several European Union Member States are in an economic recession or ended the fourth quarter in the red. This global recession is affecting the Catalan export sector, which is one of the main drivers of Catalonia’s economy. However, Catalan companies are adapting to this change and are increasing sales in the emergent economic areas, by selling outside the European Union. Thanks to this, the Catalan export sector has been able to temper the effects of the demand drop in the EU and the domestic market.

However, the positive results of the export sectors have not been enough to counteract the behaviour of the rest of the economy. The industrial gross added value decreased by 1.2% in Catalonia over the last year. The production has decreased in most of the sub-sectors, except that of food, beverages and tobacco together with that of energy and water. The annual drop in Catalonia’s industrial production is line with that of the Eurozone.

The construction sector has continued to decrease and in 2012 its contraction intensified. The construction sector plummeted by 7.6% over 2012 and it has been in recession for 5 consecutive years. The reduction in public investment and the consequent paralysis of civil work in order to reduce the public deficit have been added to the real estate crisis, which has been hitting the sector since 2008.

The service sector also showed negative figures at the end of 2012, having decreased by 0.2% in Catalonia over the last year. The decrease in consumption by families and the public sector is the main cause for this drop. In fact, some activities within the service sector, such as tourism, showed good results. The tourism industry in Catalonia grew by 9.9% in 2012, mostly due to an  increase in foreign visitors.