Research, exports and tourism power the Catalan economy

AFP - [email protected]
Research, exports and tourism power the Catalan economy
The Agbar Tower in Barcelona. Photo: Josep Lago/AFP

Catalonia, which may be poised to declare independence from Spain, is one of the powerhouses of the Spanish economy, buoyed by industry, research and tourism but burdened with heavy debt.


Economic heavyweight

Contributing 19 percent of Spain's GDP in 2016, Catalonia rivals Madrid as the richest region in the country.

It is fourth in terms of GDP per capita with 28,600 euros ($33,600), after Madrid, the northern Basque Country and neighbouring Navarra. GDP per capita in Spain overall is 24,000 euros.

Like in Madrid, unemployment is also lower than elsewhere: 13.2 percent in the second quarter of 2017 compared with 17.2 percent nationally.

Exports, big companies

Catalonia is by far Spain's top exporting region, with a quarter of all goods produced there sold abroad in 2016 and in the first quarter of 2017.

It attracted about 14 percent of foreign investment in Spain in 2015, behind Madrid, which received a huge 64 percent, but far ahead of all the other regions, according official data.

Several large companies have their headquarters in Barcelona.

But a handful have already announced plans to shift their legal headquarters out of the region because of the crisis, including Spain's third-largest bank CaixaBank, the lender Sabadell and energy giant Gas Natural.

On Monday, highway operator Abertis, telecoms company Cellnex and real estate firm Colonial became the latest to move their registered base from Barcelona to Madrid.

Major industrial player

The food and agriculture, chemistry and automotive sectors are pillars of Catalan industry, and the region is also a big logistics hub.

The biggest industrial sector in terms of jobs and turnover is agriculture and food, buoyed by the meat business which exports a lot of pork.

Oil, cattle feed and grocery products also contribute.

The region concentrates around half of all of Spain's chemical production, with a major hub in Tarragona.

In 2016, it was also the second-biggest car producer in Spain after the region of Castilla y Leon. Nissan and Volkswagen, via its brand Seat, have factories there.

Spain is the second-biggest vehicle maker in the EU, after Germany.

Research and bioscience

Since the 1990s Catalonia has invested heavily in research, particularly in biosciences such as genetics, neurosciences and cell biology, and the sector now represents seven percent of its GDP.

With many cutting-edge hospitals and research centres, including in the nuclear sector with a particle accelerator, the region says it is number one in Europe for pharmaceutical companies per capita.

New technologies are also very present in Barcelona, which every year hosts the Mobile World Congress.

Catalan universities are among the best in the country: of the top five Spanish universities in the annual ranking compiled by the Shanghai Ranking Consultancy, three are Catalan -- Pompeu Fabra, the University of Barcelona and the Autonomous University of Barcelona.

Its business schools, Esade and IESE, are also well known, and Barcelona also has big publishing houses.

Top tourism destination

With its capital Barcelona and Costa Brava beaches, Catalonia is the Spanish region that attracts the most foreign tourists, and the trend is on the rise.

More than 18 million visitors came last year, a quarter of all Spain's foreign tourists.

Its airport is the country's second largest after Madrid. In 2016, it handled more than 44 million passengers.

Barcelona's port is the third biggest in Spain for goods, and one of the largest in Europe for cruise ships.

Debt weakness

Catalonia's debt represents 35.4 percent of GDP, which made it the third most indebted region in Spain in the second quarter of 2017 -- owing around 76.7 billion euros ($90.2 billion).

Ratings agencies have given it a low "speculative" grade, which means Catalonia struggles to borrow directly on financial markets, making it dependent on loans from the central government.

Last week, both Fitch and Standard & Poor's warned they might downgrade their sovereign debt ratings for the region.

Impact of independence

The issue is much debated among both the pro- and anti-independence camps, which generally present widely different figures, often based on different methodologies and hypotheses.

If independence were to happen, Spain's economy ministry claims that Catalonia would have to leave the European Union, its GDP would fall by more than a quarter and unemployment would double.

But some economists say the newly formed republic would stay in the EU, predicting its GDP would remain stable in the short term and rise seven percent in the long run.

Catalonia's government also says the region would no longer suffer from what it calls a "fiscal deficit", given that the region pays more in taxes to Madrid than it gets back.

READ ALSO: Why Catalonia is a strategic region for Spain

Article by AFP's Emmanuelle Michel.



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