The Catalan economy improves in the first quarter of 2012 but enters recession

Barcelona (ACN).- Over the first quarter of the year, Catalonia’s GDP decreased by 0.1%, which represents an improvement in comparison to the last quarter of 2011, when it dropped by 0.5%. The Catalan economy started the first quarter of 2012 with “a light improvement” that translated into “moderating” the decreasing trend, according to a report released on Wednesday by the Catalan Finance Ministry. However, technically Catalonia entered a recession, as it had red numbers for two consecutive quarters. In addition, compared to the first quarter of 2011, the Catalan economy decreased by 0.4% between January and March 2012. The good results in exports and the tourism industry have not been enough to counteract the contraction of internal demand. This is the second recession in the Catalan economy since the end of 2007, when economic indicators detected the effects of the financial crisis.

The strength and dynamism of exports has benefited Catalan industry in the last number of economic quarters. In the three month period Catalonia’s industrial sector contracted by 0.4%, which represents better results than those registered at the end of 2011, when it decreased by 0.9%. In fact, this improvement in the industrial sector, pushed by its international sales, have been essential to end March with only a 0.1% drop in Catalonia’s GDP. The industrial sectors that registered the best results were transport material; machinery and mechanical gears; and food, drinks, and tobacco.  

The service sector grew by 0.4% compared to one year ago, however it decreased compared to the end of 2011, when it grew by 0.6%. The bad results in the retail sector, conditioned by the drop in private consumption, have been a deadweight for the Catalan services sector.

Tourism revenue grew by 17.6% in 1 year

Nonetheless, tourism has been one of the economy’s engines, as it has been during the last number of quarters. The number of people visiting Catalonia increased by 9.9% over the first quarter of 2012, compared to the same period last year. Furthermore, revenue increased by 17.6%.

Construction, at 2002 levels

The construction sector has decreased by 5.1% compared to one year ago. With this figure it accumulated 15 consecutive quarters (almost 4 years) of activity drop. This negative trend means that at the end of the first quarter of 2012, the sector has the same activity level it had a decade ago in 2002.

However, the primary sector (agriculture and fisheries) improved its results by 0.1% compared to a year ago. Despite the growth, compared to the end of 2011, the sector shows worse results, as it grew by 0.9% between October and December.