The Government of Catalonia published in November last year growth forecasts for the Catalan economy for 2016 and 2017. The data for 2016 is five tenths higher than the forecast released in May (2.9%) and equals growth in 2015. Under the new macroeconomic scenario, Catalonia's GDP would be two tenths higher than that of Spain as a whole (3.2%) and would double the expected euro area average (1.7%).
Regarding 2017, Catalan GDP is projected to grow by 2.7%. The scenario for this year reflects a certain depletion of some external drivers for growth of recent years: the downward cycle of oil prices is beginning to revert and the effects of expansionary monetary policy may become weaker. However, Catalonia's economic trend for 2017 (2.7%) remains within positive values and above the expected euro area average (1.5%).
Labour market developments
Forecasts for labour market developments suggest a further decrease of the unemployment rate in Catalonia in 2016, to 16%, and to 14.4% in 2017. The Government expects full-time equivalent jobs to grow by 3% in 2016, which will result in a net job creation of 91,400 jobs (also measured as FTEs). Looking ahead to 2017, GDP growth moderation will also entail a moderation in employment growth rates, expected to be around 2.2% and accounting for 69,000 new jobs.
In 2017, domestic demand will continue to grow driven by household consumption; however, its contribution to GDP growth (2.2 percentage points) will show some moderation compared to the previous two years (3.5 points in 2015 and 3 points in 2016). The recovery of general government consumption that began in 2015 will continue, albeit modest (1.2% in 2016, and 1.3% in 2017). As regards investments, gross capital formation —including changes in inventories— will maintain the positive trend of recent years, thanks to the strength of the economy, the easing of borrowing conditions and the low interest rates.
With regard to foreign demand, the positive behaviour of exports —in line with developments in recent fiscal years— is worth mentioning. Specifically, the outlook is for a 5.5% pick-up in 2016, and of 4.9% in 2017. In parallel, import growth will slow down progressively (6.4% in 2016 and 4.6% in 2017). For this reason, the trade balance will have no impact on GDP growth in Catalonia in 2016; as regards 2017, however, it is expected to contribute five tenths. It should be noted that, following a more moderate domestic demand, trade flows with the rest of Spain will contribute three tenths in 2016 and one tenth in 2017.