Catalonia is living a few complicated days. After the sentence of the process, a wave of protests has begun, which especially affect the Catalan capital, Barcelona.
The page of the process is closed, and another is opened, but not without leaving consequences in the Catalan economy. In these years, we have seen the deterioration of economic growth, the loss of foreign investment with the departure of headquarters, and how tourism faltered at the high points.
We see in the following lines how the process has had an impact on the main economic figures.
The process against economic growth
If something has been characterized by the Catalan economy, it is for a solid economic growth above the national average thanks to a powerful industry. However, something has been changing in recent times.
In 2014, the Spanish economy grew by 1.4%, while the Catalan economy grew four-tenths to reach 1.8 %, positioning itself as the sixth-largest economy among the Autonomous Communities.
We see the rise of the Spanish economy in 2015. The Spanish economy grows by 3.8% over the years, and the Catalan economy exceeds it by four-tenths to 4.2 %, ranking as the third fastest-growing autonomy.
In 2016, the Spanish economy grew by 3%, and Catalonia continued to lead that growth with a rate of 3.5 %, 5 tenths more than the Spanish economy, and is the fourth economy that experiences the most growth.
In 2017, the Spanish economy grew at almost the same rate as the year before, at 2.9%. In that year, the differences with the growth of the Catalan economy are reduced to only three tenths as it advances 3.2% and is the fifth fastest-growing economy among the autonomies.
As we see, in those four years analyzed, the Catalan economy showed its strength, but in 2018 the roles changed.
Spanish economic growth moderated to 2.6%. And, for the first time in this expansive cycle, the Catalan economy grew below the Spanish one at a rate of 2.3% and fell in the ranking of autonomies until it was the tenth that grows the most, which shows a high cost of Opportunity versus its potential.
The process against investment
Generally, due to the capital effect of Madrid, the majority of foreign investment tends to be concentrated due to a large number of social headquarters it houses.
The headquarters of large companies are mainly located in Madrid and Catalonia. And, between the two, they have taken 80% of the foreign investment of the whole of Spain.
If we refer to the 2018 data, 85% of the total investment was concentrated in Madrid compared to the 6.4% that was derived for Catalonia. This has its justification and is that secessionist movements by the Institution of the Generalitat have caused structural damage and institutional distrust that led to a large number of companies moving their headquarters from Catalonia to Madrid.
Last year Madrid clearly benefited from the process, with a spectacular boom in foreign investment. In fact, the 11.7% decrease in foreign investment in Catalonia is not based solely on the transfer of corporate headquarters. This broad differential would be due to the stoppage, the delay, or the simple cancellation of investment decisions that they were destined for Catalonia.
If we average between 2014 and 2018, the Community of Madrid has obtained 65% of foreign investment compared to 15.9% that Catalonia has received. But if we analyze the period of how foreign investment in both territories has evolved, the results are disappointing for Catalonia.
In this period, foreign investment in the Community of Madrid would have grown 115% to reach 39,925 million euros. On the contrary, in Catalonia, foreign investment has been reduced by 35.6% to 2,985 million euros.
The process against tourism
If we put ourselves in the background, in 2017 – the year in which the illegal referendum and the declaration of independence was promoted – the independence process caused losses of 319 million euros in the tourism sector in Catalonia and an average decrease of 9.6% of the tourist income in Barcelona in the last quarter of the year, according to Exceltur data.
If we look at the data on the evolution of income per room, it can be seen that the greatest falls in income occurred in the month of October, with a fall of 11.2% -after the referendum of 1-O-, and in December with a collapse of 15.2% due to the uncertainty of the electoral process.
However, Catalan tourism has shown a special strength, and only a very specific situation in time has led to erratic movements in its dynamism. Moreover, one year after this data, tourism managed to recover.
After the hard blow of the end of 2017, there was an improvement in expectations, and the number of international visitors who visited the county capital grew 4.3% more than the previous year. And, at the income level, it was improved with an advance of 6.9% compared to the figures of the previous year.
That is why the images we see these days do not favor the image of either Catalonia or Barcelona. A tension that does not suit the tourism sector that represents more than 10% of the Barcelona economy.