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The political uncertainty created by the tension between the Spanish and Catalan government, with the intervention in Catalonia's institutions and last year's election, haven't reduced business optimism towards the economic recovery. The moves made by Mariano Rajoy's Madrid government in Catalonia haven't affected directors' positive outlook, with leaders still predicting increased sales and investment this year.

These results come from the report Perspectivas España 2018, produced by international professional service group KPMG, with participation from CEOE (Spanish Confederation of Employers' Organizations). Over three in four (78%) of directors of Catalan companies forecast increased sales this financial year and more than half of those consulted in Catalonia (53%) see a possibility of increased investment in 2018, both in terms of new technologies and in the creation of new jobs (38%).

Research for the fourteenth edition of the report was conducted in November and December 2017, at the time of the greatest pressure on Catalonia, following the intervention in the autonomous community via article 155 of the Constitution and awaiting the results of the open playing field of the 21st December election. 256 business people based in Catalonia were interviewed for the report, almost 1,900 in total around Spain.

Economic enthusiasm

The statistics refute the Spanish government's narrative of deep worries among Catalan business leaders and which led to them easing the process of moving registered head offices out of Catalonia. In fact, only 24% of directors in Catalonia see the situation as negative. The majority have a neutral (44%) or positive (32%) view.

In Spain as a whole, assessments are generally positive too. Some 60% describe the situation as good or excellent, whilst 37% see it as normal. Only 3% see political conditions negatively.

Brexit, a threat

Business leaders remain alert over Brexit. Among the most worrying potential consequences for those surveyed are tariff barriers and a shrinking UK economy, both for around half the sample. They are followed by possible regulatory changes (46%) and a fall in the pound (43%).

When asked about the main threats to the economy, a majority (82%) then do cite political uncertainty, followed by geopolitical tensions (40%) and the potential effects of the end of the European Central Bank's expansive monetary policy (34%).