Since 1975, The Per Capita Gdp Gap Between Communities Has Narrowed By 30 Percentage Points

2021-02-16   |   by CusiGO

Despite the ups and downs, the convergence process among communities has successfully narrowed the regional per capita GDP gap by 30 percentage points. From 1975 to 2019, the gap between autonomous regions widened from 95 percentage points to 65 percentage points, mainly because the growth rate of the most backward regions was higher than average during the reporting period. The Spanish Chamber of Commerce and the Council of general economists (CGE) on Tuesday submitted a research report in the form of telematics on the economic, social and business development of the Spanish autonomous region for 45 years (1975-2020).

The report points out that in the past 45 years, per capita GDP has grown at an average annual rate of 1.75%. Galicia, larioha, castilia and Leon, as well as Estremadura and Aragon had higher than average growth rates, while Balearic Islands, Canary Islands, Cantabria and Asturias had the lowest growth rates.

The study also noted that although the number of residents, led by the communities of Balearic Islands, Canary Islands, Murcia, Madrid and Valencia, had generally increased since 1975, the autonomous regions of Castilla and Leon, Estremadura, Asturias and Galicia had lost their residents.

This demographic challenge is reflected in the labor market. In Spain as a whole, the potential labor force has doubled, in the autonomous regions of the Balearic Islands, the Canary Islands and Murcia, but in Asturias, Castilla and Leon, Galicia and Estremadura, the situation has hardly changed. With the exception of Asturias, Castilla, Leon and Galicia, the occupation has increased in all areas and decreased there. Nevertheless, the regions with the highest unemployment rates are the south, Estremadura and Andalusia, while Basque and Aragon have the lowest.

The North South gap is also reflected in absolute GDP growth. At the national level, the average annual growth rate has been 2.39% since 1975, reaching 1.1 trillion in 2019. Murcia, larioha and Canary Islands have the highest average annual growth rates; Asturias, Basque countries and Cantabria have the lowest average annual growth rates. Nevertheless, Madrid and the North – Basque countries, Navarra and Catalonia – are still the best stations. At the other end are Andalusia, Estremadura, Ceuta, melilia and Castilla Raman cha.

“The purpose of this report is not to hold rallies between autonomous regions,” CGE president Valentin picci said. “Instead, it emphasizes the virtues and challenges of the future.” In the latter, it pointed out that productivity growth was lower than expected, school failure was high, digitization was low, autonomous financial systems needed to be reformed, and the implementation of the epidemic and European aid posed challenges.

Jos é Luis Bonet, President of the Spanish Chamber of Commerce, added: “autonomy is the common cause of our success, and it’s now cut off by covid.”. The study was led by El Marin, an economist at CGE, and Raul Minges, director of research at the Spanish Chamber of Commerce.

The study also analyzes how the impact of autonomous finance has evolved since the 1990s. He concluded that in six autonomous regions – Asturias, Cantabria, larioha, Aragon, Estremadura, Castilla and Leon – per capita funding has been above average. In two other countries, Murcia and Valencia communities, both the old and the current financing model adopted in 2009, are below this level. Transfers to Madrid and Catalonia have been close to average throughout the reporting period.

What has really changed is the tax pressure, that is, the ratio of tax to GDP. If, in the 1990s, Madrid, the Basque countries, Catalonia and Cantabria were the communities with the highest ratios and estema dura the communities with the lowest ratios, then the situation in 2018 has changed significantly. The Balearic Islands and the Cantabria autonomous region are now under the least financial pressure. At the other end are the Canary Islands, followed by Basque and Navarra.

With regard to fiscal efforts (the ratio of fiscal pressure to GDP per capita in each region), in 2018, Estremadura and Andalusia were the communities with the highest tax rates; on the other side were Navarra, Basque countries and Madrid.