Catalan crisis could have cost Spain as much as €17bn in lost economic growth
Madrid — Spain’s economy is going to pay a price for Catalonia’s bid for independence. While Prime Minister Mariano Rajoy has stepped in to take over the region, upcoming Catalan elections could prove another flashpoint for the independence movement. For Oxford Economics, that means lingering uncertainty, posing a risk to sentiment, share prices and bonds. In their worst-case scenario, Spain’s economic expansion would be weaker and the economy would be €17bn smaller in 2019 than would otherwise have been the case. That "adverse" view – not Oxford’s central projection – assumes a permanent increase in bond yields of 50 basis points and a 10% decline in stocks in 2018 and 2019 compared with its baseline scenario. "The economic impact of the Catalan independence crisis is still unknown, but the increased political tensions have already caused uncertainty to surge to the highest levels in over a decade," senior eurozone economist Angel Talavera said. The Catalan crisis erupted on Octobe...
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