June 2006

Iribarren highlights improvements in Industry and job creation and on a negative note refers to the increase in the Consumer Price Index (CPI).

The Gross Domestic Product (GDP) generated by the Navarran economy rose by 3.7% in the first quarter of 2006, a rate two percentage points higher than the national average and four percentage points higher than the figures for Navarre in the previous quarter.

The Regional Minister for Economy and Taxation, Francisco Iribarren, said today at a press conference that "Navarre started off the year pretty well, with growth in every sector, particularly Industry and Services, and generation of employment."

However, Iribarren also admitted that "the negative factor" of the economic situation in the first quarter was the increase in prices, which went from 3.7% in December to 3.9% in April and 4% in May. The minister attributed these increases to the price of oil.

In terms of job creation, there was an increase of 2.9% in the average over the first quarter, very similar to the rates of previous quarters. In addition, registered unemployment figures dropped by an average of 3.8% in the first quarter.

This spurt in the Navarran economy is based on a good performance from the industry and services sectors, while there was barely any improvement to agriculture’s limited growth and a slight slowdown in the previous dynamism of the construction sector.

Francisco Iribarren highlighted the growth in the industrial sector, which came to 1.7% in the quarter under analysis, four percentage points higher than the previous quarter. This higher rate of industrial activity was based mainly on improvements in the sectors of transport material, other manufacturing industries, agrifood industries and, to a lesser extent, on paper, wood and furniture.

The service sector grew by 4.6% over the period in question, four percentage points more than the previous quarter, which brought its contribution to the expansion of the economy up by 2.5 percentage points.

Meanwhile, the construction sector generated added value that increased by 4.8% in this first quarter, but showed slightly less dynamism than in the preceding one, when it reached 5%, while a large proportion of the sector’s activity indicators continued to show high growth rates, though some of them, such as residential building and the evolution of employment, started gradually slowing down.

The value of agriculture rose by 0.7%, one percentage point more than in the latter three quarters of the previous year. This small improvement was based on a slightly more robust performance from livestock production, especially pigs, and to a lesser extent cattle and sheep. Poultry, meanwhile, barely showed any form of recovery until March.

External trade

Navarre’s international trade flows accelerated "significantly" in the first three months of the year with increases of 7.7% in export value and 27.3% in import value.

These rates were determined by the trade in automobiles, which saw an increase of almost 17% in terms of foreign sales and more than 52% in terms of purchases.

Taxation

Meanwhile, the Government of Navarre’s tax revenue by April came to 1,042.9 million euros in direct taxes, 22.3% more than in the same period last year.

This increase was based on the extraordinary growth of indirect taxes (33.5%), boosted by an increase of 63% from VAT, which was influenced by various regulatory changes and the decrease in tax rebates.

The growth rate of direct taxes was 9.5%. Taking into account fiscal adjustments with the State and taxes and other income, the overall revenue increased by 24.4% over the first four months of the year.