Having overcome last autumn’s upset, economic forecasts for Catalonia improve on a weekly basis, as the ministries and agencies publish official figures. Spain’s Independent Authority for Fiscal Responsibility, Airef, which collects and cross-references the various indicators to monitor the growth of the economy in real time, updated its figures again yesterday, and now forecasts that the Catalan economy will grow during the first quarter of 2018.
In fact, the figure does not differ greatly from the growth registered during the last quarter of 2017. According to Airef, Catalonia’s GDP grew by 0.77% between October and December, far removed from the catastrophic scenario that had been forecast.
Indeed, these figures differ greatly from the Spanish government’s estimates. In mid-December, Spain’s Economy Minister, Luis de Guindos, declared that the Catalan GDP had slowed during the last quarter and that its growth rate would be cut in half, to between 0.4% and 0.5%, while during the third quarter, growth in fact reached 0.9%. Despite his warning, Guindos was confident that these "effects" would be "short-lived".
Airef’s president, José Luis Escrivá, also predicted last November that the impact on the Spanish economy of uncertainty in Catalonia could be four tenths (around 4 billion euros) if the political crisis was temporary, and up to 1.2 percent of GDP (some 13 billion euros) if, on the contrary, the uncertainty persisted for longer. If this were to happen, Airef’s initial forecast was that Spanish economic growth could be cut by 1.5% next year. With respect to Catalonia, Airef considered that the economy could shrink by between 0.7% (in a best-case scenario) and 2.7% if tensions surrounding independence were to continue.
Nevertheless, the situation has changed since November, and Airef has been correcting its forecasts to more positive ones, in real time as the various indicators it uses to carry out its calculations have been published. These include the unemployment and employment rate, the Index of Industrial Production, consumption, imports and lending to businesses and households, among others.
Airef is keen to point out that the latest figures reflect a "slight acceleration" in the pace of economic growth, mainly because there is a greater contribution from domestic demand. The situation is also helped by the fact that demand at home has remained positive, albeit at more moderate levels.
Thus, Airef now forecasts a year-on-year growth for Spanish GDP of 3.3% for the first quarter of 2018, the same figure it estimates for the final quarter of 2017 compared to that of 2016 and 0.2 higher than it forecast for the annual average of last year. The 0.77% rise for the whole of Spain during the first quarter is also in line with what Airef had already predicted for the fourth quarter of 2017: an increase of 0.8%.
In light of the indicators that have already been published, Airef believes that exports will grow by 2.1% in the first quarter and imports by 2.2%. During the same period, between January and March, the official body estimates that Spain’s employment rate will increase by 0.7%. With regard to employment in terms of the Active Population Survey, Airef predicts that it will grow by 3.1% between January and March compared to the same period of 2017, in line with the fourth quarter of last year.