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Gibraltar: a strong economy in choppy waters

The Gibraltarian Chamber of Commerce has taken stock of the Rock’s importance to the local economy – and it’s doing its bit to keep it afloat.

By Guy Clapperton

The Gibraltarian Chamber of Commerce has updated its study on the local economy’s effect on the Campo de Gibraltar, and it looks positive. Gib was largely insulated from the world’s economic downturn from 2008 onwards as its economy focused on areas that were not badly hit; the government’s moves to bring the territory completely in line with all of Europe’s directives (confirmed in our report on the new Gibraltar House) has helped perceptions.

Perceptions, however, are window dressing compared to the hard facts behind the economy – and they make positive reading. Gibraltar continues to be a major economic driver in the region, for example accounting for one in four new jobs in the area (compared to one in six in 2009).

Part of this effect will be due to the Spanish economy having been hampered particularly badly by the financial crisis. Prices in Spain have tumbled while unemployment has risen. The report makes use of a number of the ways in which the Spanish and Gibraltarian economies interact and takes account not only of government figures but also a survey of the Chamber of Commerce members.

Facts and figures

Gibraltar remains a strong economic player. In 2013 it imported almost £381m of goods from Spain, a figure that includes net petroleum imports. The exact figures behind the “one in four jobs” claim are that Gibraltar has 25,907 out of the 109,189 jobs recorded in the Campo region overall in that year. This doesn’t take any account of jobs supported by the Gibraltar economy but located elsewhere. Gibraltar accounts for around 11% of employment in the region overall.

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Also relating to the Gib economy was the £102m earned by Spanish Frontier workers in 2013, £65m of which left the country and was spent in Andalucia. Other frontier workers earned a further £105m in Gibraltar, repatriating 20% and spending the remainder in Spain.

It’s not just the workers that spend money in the region, however; visitors also account for a lot of money. This accounted for some £207m spent in Gibraltar in 2013, £146m of which came from visitors from the Campo; residents of Gibraltar, meanwhile, visited other places in the region and spent £46m. Gibraltarians with second homes in the Campo de Gibraltar spent more than £62m in Spain, £40m of which was in the Campo region.

Overall the report concludes that Gibraltar increased the economic output of the Campo de Gibraltar by £554m in 2013, a considerable increase on the figures from the 2009 survey. Interestingly the 2009 report was based on data from 2007, meaning that the figures predated the crash; any increase between then and now has to take account of any potential dip due to the financial crisis.

Commentary

Chamber President, Christian Hernandez, commenting in the study’s official launch release said: “We have worked extremely hard to obtain this study and have expended significant financial resources to produce it. However, the result has been well worth it. These updated results clearly show the impact of the Gibraltar economy on the Campo de Gibraltar and evidence the very positive influence and impact which Gibraltar’s economy has on the Campo region and also to an extent which the Campo has on Gibraltar.”

“The first study used data from before the international financial crisis and before Spain entered a prolonged recession. In contrast, since then Gibraltar’s economy has continued to grow, create jobs and attract more inward investment. All of this has had very real benefits for Gibraltar and also for the Campo as a whole.”

The Campo de Gibraltar is an area accounting not only for the Rock but its locality as well. The study first came out in 2009 but has been completely updated to include data from 2013, which at the moment is the most recent information available. A six-page extract from the report is available at http://www.gibraltarchamberofcommerce.com/economic-impact-study-2015-summary/. Both the new version and its predecessor were researched independently by Prof. John Fletcher of Bournemouth University and a team of colleagues, commissioned by the Chamber.