October 16, 2019 / 4:45 PM / a month ago

Catalonia situation capping economic growth in Spain - minister

NEW YORK (Reuters) - Spain’s acting Economy Minister Nadia Calvino said on Wednesday the country would more widely outperform the European Union’s economic growth if sub-par growth in Catalonia returned to average.

Nadia Calvino, Minister for Economy and Business of Spain speaks during a Reuters Newsmaker in New York U.S., October 16, 2019. REUTERS/Lucas Jackson

“In the last couple of years we have seen high political uncertainty, also social tension,” in Catalonia, Calvino said, “which I’m quite sure has had an economic impact.”

She did not give details or an estimate of the impact the situation in restive Catalonia has had.

Catalonia, an engine of economic growth for all of Spain, saw its pace of growth slow down in recent years alongside other European industrial hubs, but also bogged down by the aftermath of its most recent independence bid.

Nine leaders of the 2017 separatist movement were sentenced to jail earlier this week, triggering the largest unrest in the region since the statehood attempt.

On Wednesday, pro-independence groups began marches protesting the jailings despite a new warning from the Spanish government in Madrid that it will step in if needed to guarantee security.

After the failed independence bid in 2017, more than 4,000 companies moved their headquarters out of Catalonia.

“We have seen Catalonia growing less than the average in the rest of the country, where this used to be one of the most dynamic (regions),” Calvino said at a Reuters event in New York.

“Spain has done very well (...) I think we would have done even better if we had not had this situation in Catalonia.”

Spain, the euro zone’s fourth largest economy, has consistently outperformed much of Europe since it emerged from a five-year slump in 2013. The recently downgraded forecast for 2019 still points to a growth of 2.1%, well above the projected 1.1% growth rate for the EU.

Reporting by Rodrigo Campos in New York with additional reporting by Belén Carreño and Jesús Aguado González in Madrid; Editing by Mark Heinrich

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