Halfway through the year, the main macroeconomic indicators for the first months of 2017 give grounds to expect very good results at year-end, in line with those of 2015 and 2016. GDP rose at a quarter-on-quarter rate of 0.8% until March —two tenths over the UE28 average— and the industrial sector continued to show signs of great strength, with a 3% pick-up compared to the first quarter of 2016. As regards the job market, the unemployment rate decreased to 15.3% in the first quarter and still has plenty of room for improvement, but has moved away from the 24.4% observed during the hardest period of the crisis.

 

I would like to highlight the excellent performance of Catalan exports of goods and services. With growth at 7,3% during the first three months of 2017, we are closing the best quarter of the historical series. This rise is even steeper if we look at the high-tech segment, where values exceeded 20%. The activity at the Port of Barcelona clearly reflects this export growth, with a year-on-year increase of 25.6% in the first quarter.

 

From a more internal perspective, I would like to stress that developments in the collection of taxes managed by the Catalan Tax Agency (ATC) have been extraordinary, rising by 22.8% in the first quarter. Indeed, tax collection by the ATC is very small compared to total taxes paid by Catalan citizens —with Spain controlling directly 95%—, but the figure is however very positive, underpinning the momentum of the ongoing economic recovery. Once again, I would like to note that in the past few years the Generalitat of Catalonia has made an enormous effort to reduce its deficit. In the previous issue of The Catalan Economy we explained the adjustments carried out in 2016. Now, we complete existing data with a report analysing the fiscal consolidation process in all Spanish public administrations since 2010. The report finds that 46% of deficit reduction in Spain as a whole is attributable to the autonomous communities. This great effort is not always fully recognized, and should be vindicated.

 

After taking stock of the situation, I would like to look ahead and present two initiatives undertaken by the Ministry I manage, also set forth in this newsletter. The first is the adoption of a tax applied to sweetened beverages, in line with World Health Organisation (WHO) recommendations and following the example of other governments, like the ones of France, the United Kingdom or the city of San Francisco. The second is the willingness to facilitate the creation of a Catalan financial cluster, to help develop an innovation and talent-friendly environment related to finance, and to channel credit to our companies. 99% of Catalan companies are SMEs, often showing great dynamism and entrepreneurial spirit, but also facing difficulties to access funding due to their size. Catalonia's financial and business sectors are strong, and the Government of Catalonia will work to make them meet, collaborate and help one another, based on the conviction that a sound financial sector is essential in order to reinforce business in any country.

 

Oriol Junqueras