THE EURO ZONE
With every year that passes, Spain's macroeconomic expansion appears increasingly indifferent to the activities of Spanish politicians. Evidence for this was again provided by the Bank of Spain this week, when it announced that Spain's Q4 2017 GDP expansion is likely to be 0.8%; if that statistic proves true, the Spanish economy will have grown at the same rate as it did in the third quarter, despite the Catalonian crisis that has dominated the last three months of this year.
Another figure that came to light this week suggests one reason for Spain's continued GDP expansion: the Spanish tourism industry didn't even need all of 2017 to beat its visitor numbers from 2016. From January to November this year, the country received 77.8 million tourists, compared to 75.6 million throughout all last year. Buoyed up by its world-class tourism industry, Spain has yet to even register the effects of the standoff between its central government and separatists in Catalonia.
Yet even without those bumper visitor statistics, we shouldn't be surprised that Spain's Q4 growth has probably not been affected by the political chaos of the last three months. A very recent precedent suggests that the Spanish economy - on a macro level, at least - is perfectly capable of running itself while its supposed stewards are busy elsewhere.
SUR readers will remember well the farce that was Spanish politics last year. Following an inconclusive general election in December 2015, Spain went for ten months of 2016 without a government. We saw it all: cross-party deals being attempted before collapsing, party leaders vilified for their failure to compromise, the resignation of PSOE leader Pedro Sanchez (cannily timed, as he's now back in charge of the Socialists) and the holding of a second election to sort out the mess. During these lost ten months, no one was passing any new economic legislation or “running” the Spanish economy. The result? Spain posted GDP growth of 3.2% in 2016, in line with the most optimistic forecasts and at double the eurozone average.
Catalonia has fared less well than the country its secessionists want to divorce. Since former Catalan president Carles Puigdemont held an illegal independence referendum on October 1st, around 3,000 companies have moved their headquarters away from the north easterly region. In October, business creation was down 14.3% in Catalonia compared to the same month a year earlier - its worst result in that sphere since 2011. Tourism has been hit too: at the beginning of November, bookings had fallen 20% since the October 1st vote.
Certainly, statistics such as these make you wonder about the secessionists' claim that Catalonia would be economically better off without Spain. Meanwhile, the latter's economy can look after itself while Spanish politicians fight amongst themselves.