GDP fell 0.4% until March and adds two quarters of decline, but the first signs of recovery are detected.
The Catalan economy entered a technical recession in the first quarter. The gross domestic product (GDP) fell 0.4% after having fallen 0.6% in the last of last year, according to data from Idescat and the Vice-presidency of the Generalitat.
Being two consecutive quarters of decline, it is a recession, unlike what happened at the state level, with a decrease of 0.5% in the first quarter but with 0% in the October-December period. In any case, the first indicators point to a recovery from the second half of March that could consolidate as the vaccination process advances and the restrictions related to the pandemic disappear.
The evolution between January and March is explained by “the worsening of the pandemic at the beginning of the year, very generalized on a European scale” and that implied the maintenance of the restrictions .
In year-on-year terms, the decline in GDP improved to a decline of 4.3%, after the 9% contraction in the previous quarter . The data reflects that the historical collapse of 21.6% experienced in the second quarter of last year, at the height of the coronavirus pandemic, is far away .
Second half of the year, on the rise
In the opinion of the Vice-Presidency, “the strong impact of the health crisis on the Catalan economy” was due to the greater weight of the services most exposed to social interaction and due to the importance of foreign tourism .
In any case, advances in the vaccination process invite optimism. In fact, the Government estimates that this year, the Catalan economy will grow 6% for the year as a whole and 5.2% next year. With all this, it will be possible to advance in the lifting of restrictions and, therefore, “prop up a recovery that could be especially intense in the second half of the year .”
These positive indicators began to be detected from the second half of March, when mobility restrictions were relaxed . All this has resulted in a greater dynamism of consumption, according to the data on the use of bank cards; and the improvement of the labor market, especially with the reduction of people in temporary employment regulation files ( ertes ), which fell to 157,873 people.
In the first quarter of this year, construction, with a decrease of 11.5%; and services, with a fall of 5.9%, lead the setbacks; while industry and agriculture were gterrenopositive, with increases of 1.9% and 1.2%, respectively.
The Vice-Presidency and Conselleria d’Economia highlights that employment grew “slightly” during the first quarter in Catalonia, by 33,300 people. In year-on-year terms, its fall moderated to 2.2%. The unemployment rate fell from 13.9% in the fourth quarter of last year to 12.9% during the first of this year.