THE ECONOMY OF NAVARRA IN FIGURES

THE ECONOMY OF THE ECONOMY OF THE ECONOMY OF THE ECONOMY OF NAVARRA IN FIGURES NAVARRA IN FIGURES NAVARRA IN FIGURES NAVARRA IN FIGURES

Dirección General de Política Económica y Empresarial y Trabajo April, 2018

Latest developments Latest developments Latest developments Latest developments Latest developments Latest developments Latest developments Latest developments

Projections&challenges Projections&challenges Projections&challenges Projections&challenges Projections&challenges Projections&challenges Projections&challenges Projections&challenges

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1 ^{Some Some Some Some facts} Some Some Some Some facts ^{facts facts} facts and figures facts facts facts and figures and figures and figures and figures and figures and figures and figures

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3 3 3

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1. Some facts and figures

Among the 3 spanish regions with the highest GDP per capita and 3% higher than EU-28

Regions with the highest GDP pc in 2017 Regions with GDP pc higher than Spain in 2017

Source: INE.

GDP per GDP per GDP per

GDP per capitacapitacapita 2017capita201720172017 Index

IndexIndex

Index 100= 100= 100= 100= SpainSpainSpainSpain

+32,4%

+ ++

+23,7% 23,7% 23,7% 23,7%

+35,2%

1. Some facts and figures

The lowest unemployment rate

Regions with lowest unemployment rate in 2017 Regions with lower rate than Spain in 2017

Source: INE.

Unemployment Unemployment Unemployment

Unemployment rate rate rate 2017 rate 2017 2017 2017

+10,2%

+10,2%

+10,2%

+11,3%

+11,7%

The 34,8% of the adult population possesses a university

degree (28,5% in Spain), which leads to skilled labour force…

Source: INE.

% % %

% EmployeesEmployeesEmployeesEmployees withwithwithwith highhighhigh educationhigheducationeducationeducation 2017201720172017

1. Some facts and figures

42,5

50,0

0,0 10,0 20,0 30,0 40,0 50,0 60,0

Castilla - La Mancha Baleares Extremadura Murcia Canarias Andalucía C. Valenciana Castilla y León Aragón La Rioja TOTAL NACIONAL Galicia Cataluña Cantabria Asturias NAVARRA Madrid País Vasco

Extremadura Canarias Baleares La rioja Murcia Asturias Castilla La Mancha C. Valenciana Andalucía Galicia Cantabria TOTAL NACIONAL Castilla y Léon Cataluña País Vasco NAVARRA Madrid Aragón

27,9

36,9

Canarias Baleares Murcia C. Valenciana Andalucía Galicia Asturias Castilla-La Mancha Cantabria TOTAL NACIONAL Castilla y León La Rioja Cataluña Aragón País Vasco NAVARRA Madrid Extremadura

45,7 49,8

INDUSTRY INDUSTRYINDUSTRY INDUSTRY

% %

% % IndustryIndustryIndustry workersIndustryworkersworkersworkers in in in in highhighhigh and highand and and mediummediummediummedium----highhighhighhigh technology

technology technology

technology activitiesactivitiesactivitiesactivities (February 2018)

SERVICES SERVICESSERVICES SERVICES

% %

% % ServiceServiceService workersServiceworkersworkersworkers in in in knowledgein knowledgeknowledgeknowledge intensiveintensiveintensiveintensive activities

activities activities activities (February 2018)

Source: Ministerio de Empleo y Seguridad Social.

... and high-qualification occupations

1. Some facts and figures

The most industrialised region in Spain (26,0% of GDP in 2017).

Manufacturing is related to the welfare and quality jobs

Source: Nastat, INE.

%

% %

% ManufacturingManufacturingManufacturing overManufacturingoveroverover GDP versus GDP pcGDP versus GDP pcGDP versus GDP pcGDP versus GDP pc % % % % ManufacturingManufacturingManufacturingManufacturing overoveroverover GDP versus % GDP versus % GDP versus % GDP versus % fixedfixedfixedfixed employments

employmentsemployments employments

1. Some facts and figures

An open economy. Internationalization is related to economic growth and higher competitiveness

Exports Exports Exports

Exports and and and and importsimportsimportsimports overoverover GDP in overGDP in GDP in GDP in 2017201720172017

Trade Trade Trade

Trade balance balance balance overbalance overoverover GDP in 2017 GDP in 2017 GDP in 2017 GDP in 2017

1. Some facts and figures

Source: Datacomex, INE.

With a relevant percentage of high and medium-high technology exports

Source: Datacomex.

54,0

68,1

0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0

Extremadura Rioja, La Asturias Murcia Canarias Galicia Andalucía Cantabria Castilla-La Mancha TOTAL NACIONAL País Vasco C. Valenciana Cataluña Aragón NAVARRA Madrid Castilla y León Baleares

% High and

% High and % High and

% High and mediummediummediummedium----highhighhigh technologyhightechnologytechnology exportstechnologyexportsexportsexports overoverover manufacturingovermanufacturingmanufacturingmanufacturing industryindustryindustryindustry exportsexportsexportsexports 2017201720172017

1. Some facts and figures

Descending unit labour costs are supporting exports …

Unit Unit Unit

Unit LabourLabourLabourLabour CostsCostsCostsCosts Index

Index Index

Index 2008= 1002008= 1002008= 1002008= 100

90 100 110 120

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Navarra País Vasco Spain EU Germany

Source: Eurostat, INE and Servicio de Política Económica.

1. Some facts and figures

… due to the increase in real productivity of tradable activities

(all except construction, financial and insurance, public administration, health an education and real state)

80 90 100 110 120

2008 2009 2010 2011 2012 2013 2014 2015 2016

Navarra País Vasco Spain EU Germany

Real Real Real

Real ProductivityProductivityProductivity . Productivity. . . TradablesTradablesTradables activitiesTradables activitiesactivitiesactivities Index

IndexIndex

Index 2008= 1002008= 1002008= 1002008= 100

Source: Eurostat, INE and Servicio de Política Económica.

90 100 110 120

2008 2009 2010 2011 2012 2013 2014 2015 2016

Navarra País Vasco Spain EU Germany

Real Real Real

Real ProductivityProductivityProductivity . Non Productivity. Non . Non ----tradables. Non tradablestradablestradables activitiesactivitiesactivitiesactivities Index

Index Index

Index 2008= 1002008= 1002008= 1002008= 100

1. Some facts and figures

Growth employment is focused on export-oriented clusters (S3 Strategy)

Affiliatesweightonthenationaltotal (in %)

Affiliates variation rate 2014-2017 (in %) 0,0

2,0 4,0 6,0 8,0 10,0

-10,0 -5,0 0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0

Automotive industry

Pharmaceutical industry Metal industry

Food industry

Chemical industry Paper industry

+ Health sector + Food industry

+ Automotive & mechatronics + Health sector

+ Food industry

+ Automotive & mechatronics

1. Some facts and figures

Source: Ministerio de Empleo y Seguridad Social and Servicio de Política Económica.

-0,32%

+ 1,22%

-2,0 -1,0 0,0 1,0 2,0

Murcia Castilla y León Aragón Extremadura C. Valenciana Castilla-La Mancha Cataluña Madrid La Rioja Cantabria TOTAL CC.AA.

Asturias Andalucía Galicia Baleares Canarias NAVARRA País Vasco

Source: Ministerio de Hacienda y Función Pública.

Public PublicPublic

Public deficitdeficitdeficitdeficit totototo GDP ratio in 2017 GDP ratio in 2017 GDP ratio in 2017 byGDP ratio in 2017 bybyby autonomousautonomousautonomousautonomous communitiescommunitiescommunitiescommunities

Better fiscal commitment than the regional average

Target 2017: -0,6% GDP

1. Some facts and figures

Rated above its sovereign related

RATING S&P

Navarra A

País Vasco A

España¹ A-

Galicia BBB+

Madrid BBB+

Aragón BBB-

Canarias BBB+

Extremadura BBB

Andalucía BBB+

Baleares BBB

Comunidad Valenciana BB *-

Cataluña B+

Source: AFI.

1. Some facts and figures

1 Raised from BBB+ on march 23, 2018.

1. Some facts and figures

R&D expenses R&D expenses R&D expenses

R&D expenses overoveroverover GDP in %, GDP in %, GDP in %, 2016GDP in %, 201620162016

1,19

1,62

0,0 0,4 0,8 1,2 1,6 2,0

Baleares Canarias Castilla - La Mancha Extremadura Asturias La Rioja Cantabria Galicia Aragón Andalucía Murcia C. Valenciana Castilla y León TOTAL NACIONAL Cataluña NAVARRA Madrid País Vasco

Strong commitment with R&D&innovation

Source: INE.

1. Some facts and figures

Strong commitment with R&D&innovation

1. Some facts and figures

The third region with the greatest number of patents per million inhabitants

58

76

0 20 40 60 80 100 120

Baleares Canarias Castilla La Mancha Extremadura Castilla y León Asturias País Vasco Cantabria La Rioja Galicia Murcia TOTAL NACIONAL Cataluña Andalucía Madrid NAVARRA C. Valenciana Aragón

Number NumberNumber

Number of of of of patentspatentspatentspatents per per per per millionmillionmillionmillion inhabitantsinhabitantsinhabitants in inhabitantsin in 2016in 201620162016

Source: OEPM.

1. Some facts and figures

Quarterly Quarterly Quarterly

Quarterly GDP, 4th 2007 = 100 GDP, 4th 2007 = 100 GDP, 4th 2007 = 100 GDP, 4th 2007 = 100 indexindexindexindex

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

NAVARRA

ESPAÑA

Quarterly GDP recovery

100 index:

4T-2007

Source: INastat, INE.

2. Latest development

Domestic demand contribution is solid…

Source: Nastat, INE.

Domestic demand contribution GDP pps Foreign demand contribution GDP pps

IV-2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 IV-2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

SPAIN NAVARRA

2. Latest development

… led by strong consumption

Source: INE.

2. Latest development

6,4

8,5

0,0 2,0 4,0 6,0 8,0 10,0

Extremadura Castilla y León Aragón Asturias Murcia Andalucía País Vasco Canarias Baleares Cantabria Cataluña TOTAL NACIONAL C. Valenciana Castilla - La Mancha La Rioja Galicia Navarra Madrid

Indicator Indicator Indicator

Indicator forforforfor ActivityActivityActivity in Activityin in in thethethethe ServiceServiceServiceService Sector (IASS)Sector (IASS)Sector (IASS)Sector (IASS) Average

AverageAverage

Average variationvariationvariationvariation raterateraterate 2017201720172017

Good start of the year: some acceleration in employment

Source: Ministerio de Empleo y Seguridad Social.

2. Latest development

2009 2009 2009

2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018

January

----2.775 2.775 2.775 2.775

February

2.311 2.311 2.311 2.311

March

1.390 1.390 1.390 1.390

Social Security Social Security Social Security

Social Security affiliatesaffiliatesaffiliatesaffiliates. . . . MonthlyMonthlyMonthlyMonthly variationvariationvariationvariation

And good data will continue: Volkswagen Navarra plant will produce a second model from 2019 …

2. Latest development

287.287 289.590 305.700 298.358 296.799

244.127

297.097

350.000

2012 2013 2014 2015 2016 2017 2018 (p) 2019 (p)

Fuente: Ministerio de Economía, Industria y Competitividad, Nastat and Servicio de Política Económica.

+21.7%

+17.8%

Automobiles Automobiles Automobiles

Automobiles productionproductionproduction (in production(in (in units(in unitsunitsunits) and ) and ) and goods) and goodsgoodsgoods exportsexportsexportsexports variationvariationvariationvariation (in %)(in %)(in %)(in %)

Goods Goods Goods

Goods exportsexportsexportsexports

… that will bring a notable increase in production and exports

2. Latest development

2018 2018 2018

2018 2019 2019 2019 2019

BBVA 2,8 2,4

Hispalink 2,4 2,3

Laboral Kutxa 2,8 nd

Funcas 2,7 nd

Ceprede 2,4 nd

AVERAGE AVERAGE AVERAGE

AVERAGE 2,6 2,6 2,6 2,6 2,4 2,4 2,4 2,4

GDP growth in Navarra will continue about 2,5% next years

Source: BBVA, Hispalink, Laboral Kutxa, Funcas.

3. Projections and challenges

Forecast Forecast Forecast

Forecast Real GDP Real GDP Real GDP growthReal GDP growthgrowthgrowth in % in % in % in %

Similar to our baseline scenario

Source: Gobierno de Navarra.

3. Projections and challenges

Navarra Navarra Navarra

Navarra macroeconomicmacroeconomicmacroeconomicmacroeconomic frameworkframeworkframeworkframework ,2017,2017,2017,2017----2020 2020 2020 2020 +2,8

+2,8+2,8 +2,8

2016 2017 2018

2016 2017 2018

2016 2017 2018 -0,2%

2016 2017 2018

2016 2017 2018 2016 2017 2018

2016 2017 2018

International International International

International MonetaryMonetaryMonetaryMonetary FundFundFundFund: : : : worldworldworldworld output output output output yearyearyear overyearoverover yearoveryearyearyear changechangechange 2016change201620162016----2018201820182018

RUSSIA RUSSIA RUSSIA RUSSIA

CHINA CHINA CHINA CHINA SPAIN

SPAINSPAIN SPAIN

JAPAN JAPANJAPAN JAPAN USA

USA USA USA

BRAZIL BRAZIL BRAZIL BRAZIL MEXICO

MEXICOMEXICO MEXICO

EURO AREA EURO AREA EURO AREA EURO AREA

2,9%

2,0%2,3%

-3,5%

1,1%1,9%

3,3%3,1%

2,4% 1,8% 1,7%

6,7% 6,8%6,6%

0,9%

1,8%

1,2%

1,5%

2,3%2,7% 1,8%2,4%2,2%

2016 2017 2018

Source: IMF (WEO update, january 2018).

3. Projections and challenges

Greater than its partners

3. Projections and challenges

Protectionism and tightening of monetary policiy are the main

threats in the baseline scenario

Dirección General de Política Económica y Empresarial y Trabajo