Sunday, November 5, 2017

Spain likely to lose up to 27 bln euros if Catalan crisis worsens

Spain could lose up to 27 billion euros
The Bank of Spain, the central bank, has warned that the economic growth of the country could be affected if the constitutional crisis in the Catalan region gets worse.

Spain could lose up to 27 billion euros (31.35 billion US dollars), according to the data of the bank's last Financial Stability report.

The frustrated unilateral independence declaration of Catalonia has already damaged tourism and deterred investment. About 2,000 companies representing more than 30 percent of Catalan employment had changed their legal headquarters from the region to other places in Spain.

The Catalan tax authority estimated Friday that the gross domestic product (GDP) would suffer a drop of between 0.7 percent and 2.7 percent in 2018, which would result in a lower growth for the rest of Spain.

Bank of Spain governor, Luis Maria Linde, had already warned in late September that political tensions could affect growth and financial stability.

So far, the Bank of Spain had calculated that the GDP would rise by 3.1 percent this year and by 2.5 percent in 2018 and by 2.2 percent in 2019. The central bank indicated that in a more adverse context, Spain's economy would grow by 1.5 percent next year.

The Bank of Spain has also warned that the Catalan economy has suffered an impact in relation to the contracting of loans or cars' purchases.
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