economy

The Catalan economy grew by 1.3% from July 2013 to June 2014. However, the economic recovery has particularly sped up and got stronger over the second quarter of 2014, when it grew by 0.6% in quarterly terms, according to data released on Wednesday by the Catalan Statistics Institute (Idescat) and the Catalan Finance Ministry. The GDP growth between April and June was higher than the one registered during the first quarter of the year, set at 0.4%. With the 0.6% registered at the end of June, Catalonia has achieved 5 consecutive quarters of posting positive figures, leaving the recession more than a year behind. Regarding economic sectors, services have led the economic recovery, posting a 1.8% annual growth at the end of the first half of 2014.

The President of the Catalan Government, Artur Mas, stated on Tuesday that the self-determination process is following 3 principles: respect for "the law and dialogue", "but also democracy", which will guarantee that citizens are able to vote. He said that the Government "has done its homework" by "providing information" about the process and how to build a new state, by ensuring "participation" from civil society, by proving "a will to talk" with Spanish authorities, and by showing "determination" to go ahead with the mandate resulting from the last Catalan elections to organise such a vote. Mas highlighted that the vote will be legal since it will use Catalan legislation. However, he asked citizens for "psychological strength" for the months ahead and future "challenges". Mas also emphasised that Spain's "economic recovery" is mostly "coming from Catalonia", since Catalans are "leading" the statistics regarding job creation, exports, tourism, scientific research and foreign investment.

568,231 unemployed people were registered with the Catalan Public Employment Service (SOC) this July, 1,983 less than in June, which represents a 0.35% reduction. This is 42,198 less unemployed people than in July 2013, or a 6.91% annual reduction. All of the Catalan provinces have seen a drop in unemployment over the past month. In addition, there has been an increase of Catalans registering with Social Security, a 12% rise in hiring rate and nearly all sectors in Catalonia are creating new jobs. In Spain as a whole the number of people looking for work stands at 4,419,860 people, 281,478 fewer than the previous year, which represents a 5.94% annual drop. 

The pace of the Catalan economic recovery is "accelerating" according to Miquel Valls, the President of Barcelona's Chamber of Commerce. This is especially apparent in the second quarter of this year, which saw the interannual GDP grow by 1.3%, compared to the 0.4% growth registered in the first quarter of 2014. This rapid acceleration will oblige the Chamber to review in its autumn report its economic forecasts for Catalonia in 2014 and 2015, which are currently set at 1.2% and 1.5% respectively. Although there is still uncertainty to exactly what shape the new economic climate will take, the new predictions of growth could be above 1.5% for 2014 and 2% in 2015, indicated Valls.

The Basque domestic appliance company Fagor Electrodomésticos, which declared bankruptcy in November 2013, has been bought by the Catalan company Cata. On Tuesday the Mercantile Court Number 1 in San Sebastian awarded Fagor's assets to the Catalan domestic appliance company for the price of €42.5 million, €14.5 million more than was offered by the Algerian company, Cevital. Cata offer covered all of the bankrupt divisions of the Basque cooperative and pledged to create 705 direct jobs, as well as ensuring the continuity of the brand names Fagor, Edesa, Aspes and Splendid. Cata stated that the purchase of Fagor was important because it will create "industrial synergies" between the two companies.

International tourists spent €5.986 billion in Catalonia during the first six months of the year. This represents a 3.9% increase on the same period of 2013. Furthermore, it is also 22.7% of the total foreign tourist expenditure in Spain for this period. Catalonia is the second Autonomous Community where foreign visitors spent more money during the first half of 2014. The Canaries came first with an expenditure of €6.069 billion.  However, both the tourist expenditure in Catalonia per stay and per day in the first half of 2014 fell in comparison with the same period in 2013. Foreign tourists spent €840 per stay (2.6% less than in 2013) and €129 per day (-1.4%). Catalonia is also the area where international tourists spent more money during June, reaching €1.551 billion. This represents 0.2% less than in June 2013, but 24.9% of the total foreign tourist expenditure in Spain that month.

The number of unemployed people in Catalonia has decreased by 69,800 in the second quarter of this year; the largest drop in unemployment rates in the whole of Spain and the biggest decline in the jobless population in the last 12 years. Catalonia also created 79,300 new jobs in the second quarter of this year, a rise of 2.68% in comparison to the first quarter. This means that the total unemployment rate in Catalonia has dropped by nearly 2 percentage points since March 2014, falling from 22.1% to 20.22%. Spain as a whole has also registered a drop in unemployment of 310,400 people, meaning the number of jobless citizens is down to 24.47% of the total active population.

According to a report published on Thursday by Barcelona's Chamber of Commerce, the Spanish Government's investment in infrastructure in Catalonia has dropped by 50% in the last 10 years, while it has been reduced by 25% throughout the rest of Spain in the same period. The President of the business association, Miquel Valls, stated that this reduction represents "a break"in the Catalan economy's growth, which could be in a better position to speed up the economic recovery. The report takes into account the executed investment made by the Spanish Government and its public companies in areas such as airports, high-speed railway or harbours. In 2006, the Spanish Parliament recognised "a historical" lack of investment in Catalonia when it approved the Catalan Statute of Autonomy and set a minimum investment percentage share to be made in Catalonia to compensate this in the next 7 years. This share was never respected.

On Tuesday, the Spanish Finance Minister, Cristóbal Montoro, rejected to review the funding scheme of the Autonomous Communities to grant them more resources, despite the fact that the Catalan Government is under-budgeted. On Wednesday, the Spanish Finance Ministry downplayed Catalonia's fiscal deficit by issuing the so-called fiscal balances, which calculate the inter-territorial fiscal transfers, posting a significantly low Catalan contribution. According to the Spanish Government's new calculations, Catalonia gave away €8.46 billion in 2011, representing 4.35% of its GDP. The figure is significantly lower than the Catalan Government's calculations: €15.01 billion and €11.09 billion, using two complementary methodologies used by the Spanish Executive in 2008 and agreed among independent university experts.

Catalonia received 1,677,679 foreign tourists in June, an increase of 2.4% compared with the same month in 2013. The combined number of foreigners who visited the Autonomous Community in the first half of this year reached 7.129 million, which is an increase of 6.7% and sets a historic new record for the number of foreign visitors passing through Catalonia. This good performance has been shared throughout Spain, as it hosted 28 million foreign tourists in the first half of 2014, marking a new record.

BBVA will pay €1.187 billion to the Fund for Orderly Bank Restructuring (FROB) for the nationalised Catalan bank, beating the other two offers in the final phase of the auction process presented by Santander and Barcelona-based CaixaBank. This means that Spanish taxpayers will lose €11.84 billion considering guarantees and due to the fact that the Spanish Government injected €12.622 billion into Catalunya Banc since it was nationalised in 2011. Catalunya Banc was a private bank owned by CatalunyaCaixa, the merger of three historical Catalan savings banks (Catalunya, Tarragona and Manresa). It could not face the deep restructuring process required to meet the new banking regulations. The bank had a weak financial position resulting from a high exposition to toxic real estate and mortgages assets, as well as suffering from poor management. The BBVA will become the second largest bank operating in Catalonia, doubling its past position.

German chemical multinational BASF does not expect to launch its intermodal merchant station in Tarragona's petro-chemical compound until early 2017, two years after it initially forecast. The date of commissioning, as recognised by the company, is conditioned by the start of construction of the third rail connecting the railway line in Tarragona to the Mediterranean Railway Corridor (a strategic transport priority for the European Union), an infrastructure the Spanish Government keeps delaying. Although there is currently no start date for construction, BASF has set up the company ‘Combiterminal Catalonia SL’: a 'joint venture' with Contank SA, Hoyer España SA, and Schmidt Holding GmbH and Tradillo Inversiones SL (Pañalón Group) collaborating to build and operate the station.

63% more exports have been channelled through the Port of Barcelona during the first six months of 2014 than in the same period of 2008, prior to the economic crisis. On Friday, the President of Barcelona Port Authority, Sixte Cambra, announced that 2014 will be the year of record sums of exports and imports from the Catalan port. The Port finished the first half of 2014 with 22.5 million tons of goods transported, representing an increase of 7% compared with the same period of 2013. Cambra said that growth occurred in all cargo sections of the port, driven by foreign trade, especially exports.

''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.

The Catalan Government forecasts that unemployment will fall to 21.7% in 2014, and will be below 20% in 2015. This is according to the Macroeconomic Forecasts report published by the Catalan Ministry of the Economy on Monday. The report confirms the recovery of the Catalan economy, which has accumulated positive growth since the second quarter of 2013. For 2015, the Catalan Government expects the economy to grow 2.1%.