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Spain could lower 2018 economic forecast due to Catalan crisis

Spain could cut its 2.6% economic growth forecast for 2018 if the dispute with Catalonia is not resolved quickly, Agence France-Presse reported.

The news agency cited Deputy Prime Minister Soraya Saenz de Santamaria, who said that despite a 3% increase in the rest of Spain, investments have declined 10% in Catalonia. The autonomous region accounts for 19% of the country's GDP. She added that tourist bookings have fallen between 20% and 30% in Barcelona.

Catalan leader Carles Puigdemont said Oct. 10 that the region was delaying putting independence into effect while seeking dialogue with the Spanish government. Spanish Prime Minister Mariano Rajoy gave Catalonia an Oct. 19 deadline to drop its independence bid.

The political uncertainty has forced some companies to move their headquarters from Catalonia to elsewhere in Spain, while rating agencies have warned of the potential economic impact of rising tensions.

S&P Global Ratings said political friction could weaken consumer and business confidence and put downward pressure on the ratings of some 40 rated Spanish companies. Fitch Ratings had said that the situation could prompt a negative ratings action on Spain.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.