Spain's economy reeled from Catalan's crisis but may suffer in longer term
Reporter: Jimmy Ding、Vicki Yang (Reported from Spain)
Editor: Jimmy Ding
Spain’s GDP has achieved 3.1% growth in 2017 year-on-year despite the political uncertainty clouded by Catalonia’s independence movement started on last year October, dragging the last quarter growth rate down to 0.7%.
“Catalonia’s independent movement may have bad impact on Spain’s economy in the long term since the movement happened in late 2017 which do not have strong influence on 2017’s economy performance.” said Alfonso Ballesteros, Secretary General of Spanish Chamber in Hong Kong.
Although there was a slowdown of Spain’s growth rate in the last quarter, the whole economy’s performance in 2017 is in line with economists’ forecast at 3.1%.
The bank of Spain explained 2.6% of the growth was from domestic demand while external demand contributed the other 0.5% of the growth.
The impact of Catalonia’s independence movement
When asked about the effect once the split were made,“Madrid’s stock exchange has taken 90% of all listed companies’ valuation.”answered Oscar Moya, posted as corporate communication of Madrid’s stock exchange. Madrid’s stock exchange may suffer but not much since Madrid is the major regional stock exchange in Spain.
According to Guardian’s report, Catalonia takes 16% of Spain’s whole population, however, more than one fifth of Spain’s economy is from Catalonia. Catalonia’s export amounts to 65.2 billion Euros, representing one quarter of Spain’s total export.
The wave of political uncertainty has spread to Spain’s citizens. “I have taken my money out of bank Banco Sabadell SA since the political uncertainty hit Catalonia and some policies may come out which restrict my use of money in Catalonia.” said Cabezuelo Lorenzo, global communication professor from University of Madrid.
Sabadell is Spain’s fifth-biggest bank, the headquarters of which has been located in Catalonia. Sabadell ditched Catalonia and will move to Alicante, another city of Spain.
Spain on its way of economy reinvigoration
Thanks to the manufacturing companies in Spain, the economy of Spain is on a roll since 2008 when the financial crisis hit Spain, the property bubble burst that year. Spain’s GDP has maintained stable growth rate in the past 3 years, above 3%, outstripping Eurozone average around 2%.
The recent movement from global institutions has proved Spain’s economy as diamonds in rough. The International Monetary Fund has raised Spain’s 2018 growth forecasts from 2.4% to 2.8%, beyond France, Germany and Italy. Rating agencies, Moody’s, Fitch and Standard and Poor’s have all upgraded Spain’s sovereign debt ratings.
Although the whole economy is in expansion, there are still problems unsolved. The unemployment rate remains high, above 18 percent and is near 39 percent for younger workers.
According to New York Times report, Some 4.25 million people in a nation of 47 million are officially looking for work. Even in areas of growth, fraught labor negotiations and frequent strikes attest to the insecurity of work and the pain of diminished wages.
Reporters: Jimmy Ding, Vicki Yang reported from Madrid.
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