Eduardo López Alonso, 9 July 2021
Pere Aragonès, during the presentation of the Memòria Econòmica de la Cambra de Comerç.
Aragonès demonstrates in the Chamber of Commerce the political turnaround against Torra
The President of the Government of Catalonia, Pere Aragonès, this Friday urged businesspeople to promote alliances with society and administrations to open a new era of well-being for Catalonia. Aragonès has launched this message of cohesion during the presentation of the Barcelona Chamber of Commerce’s Catalonia Economy Report, in a clear sample of the copernican turn that the Catalan Executive stars, that puts in front, according to Aragonès, “to generate prosperity” and “welfare” in front of other arguments. A year ago, the previous president, Quim Torra, focused the centre of his speech at the same forum of the Cambra and Llotja on the pro-independence agenda, the investment deficit (‘Madrid robs us’) and directly urging Catalan businessmen to “rebel against the Spanish government”. While Torra encouraged conflict and tension last year, Aragonès, on the contrary, this Friday urged businessmen to contribute to collective well-being, alliances, and public-private collaboration. For Aragonès, “reaching new heights of sovereignty” takes second place to the fight against inequality, according to his speech to the members of the Chamber of Commerce.
The President of the Generalitat called on Catalan businessmen to “think big” and to “transform their attitude” in order to promote “a leap forward to modernity” in a new Catalonia focused on the quality of life of its inhabitants. The President praised the role of the administrations in general in tackling the current economic crisis, with Keynesian economic recipes that have been questioned in the past and that have proven to be the most appropriate for reactivating the economy. Fiscal expansion, public spending and expansionary policies against inequality are the current solution, without reducing demands for greater economic independence. Aragonès went on to recall the ‘shock’ measures that have been applied and which must now be reinforced with structural measures that offer a “transformative solution” for Catalonia, with a greater commitment by economic actors to innovation and training.
The president of the Chamber of Commerce, Mònica Roca, stressed that the economic balance of 2020 has been the most negative in history, with an “unequal” and “unfair” impact, but that this 2021 will see a “very intense” increase in GDP. Roca recalled that her objective as president of the Chamber of Commerce continues to be to demand a state of Catalonia as the best alternative for the Catalan economy.
In terms of growth prospects, the Cambra forecasts that the Catalan economy will recover the level of GDP it had before the pandemic by the end of 2022. Specifically, forecasts point to Catalan GDP growth of 6.0% by 2021 and 6.1% in 2022, although this could be revised upwards in view of the rapid recovery of some economic sectors, according to Roca.
The Cambra forecasts a strong upturn in private consumption from the second half of 2021 thanks to improved expectations, the recovery of the labour market and a greater propensity to consume as a result of the forced savings that families had to make throughout 2020. From the second half of 2021 and especially in the run-up to 2022, the Chamber’s research centre expects a significant part of the transfers from the European Next Generation funds to arrive, which will mean a very significant injection of investment that could contribute up to two extra points of growth to annual GDP.
For Roca, the extraordinary Next Generation funds “represent a major challenge”, because they represent “a unique opportunity to promote a more digitised, sustainable and equitable economic model”.
Over the year as a whole, Catalonia’s GDP fell by 11.5% in 2020 according to Idescat, a far cry from the positive growth of 1.9% recorded the previous year. This contraction in GDP has occurred due to the negative contributions of both domestic demand (-8.2 p.p.) and external demand (-3.3 p.p.). The component that explains half of the fall in GDP has been household consumption due to the very nature of covid 19.
In particular, administrative closures prevented consumers from doing some of their usual spending, triggering forced savings especially during the second quarter of 2020. Investment also performed very negatively in 2020, with a change of -13.6%. In contrast, public consumption increased by 5.1% due to health spending and the extraordinary measures taken to mitigate the effects of covid. Finally, the foreign trade balance made a negative contribution to growth, essentially due to the fall in the number of foreign tourists (-82.2% compared with 2019).
In the opinion of the director of the Economic Report of Catalonia, Carme Poveda, the crisis caused by covid has had an uneven and K-shaped impact. The sectors most affected were trade, transport, hotels and tourism. On the other hand, other sectors, such as technology, health and education, recorded growth. Poveda predicts that Catalonia will be at the forefront of the recovery in Europe in the next two years. In 2022, GDP levels prior to the pandemic will be reached, although uncertainties remain.
The Economic Report of Catalonia, published annually by the Consell de Cambres de Catalunya, reaches its 56th edition this year, making it the annual economic publication with the longest history in Catalonia. For the last six years, this traditional economic balance sheet has added a territorial analysis of the Catalan districts and counties. This territorial analysis allows business people, professionals and institutions to gain an in-depth knowledge of their closest economic reality. This year, the central theme of the publication was the impact of covid on the economy. With this objective in mind, the effects of the pandemic on the Catalan business fabric, on the welfare of citizens, on new forms of work and on health management were analysed from a broad perspective.