Investor

presentation
July 2019
Agenda

1. Key economic drivers of Catalonia

2. Fiscal rebalancing

3. Debt and treasury overview

Brief summary of Catalonia
Population (2019) 7.6 million
Similar to Switzerland, Austria, Finland
and Denmark
16% of Spain’s total population
13 EU countries have less inhabitants than
Catalonia
GDP (2018) 242,313 M €
Similar to Finland, Denmark and Ireland
19,1% of Spanish’s GDP
Only 8 countries in the EU have a higher
GDP per capita (PPS)
GDP per capita Catalonia: 113.5
In PPS (EU-28=100) (2018)

Barcelona and its metropolitan area form a leading economic and

technological center in Europe. Also a center of trade, culture and
services, and a first-rate tourist destination.
Catalonia also has a network of intermediate cities of great
dynamism.
3
 Key data of the Catalan economy

Strong economic growth in Very favourable external Moderation in industry

recent years balance (2018, % of GDP) (% y-o-y GVA )
4 5
Catalonia has one of the highest trade 2017 2018
2017 2018
3 surpluses in the EU, only after LU (34,1%), IE 4
12.2 (31.2%) and MT (21.4%)
3
2
6.8 2
1 4.4
2.5 2.0 1
0 0
IT FR EA DE ES CAT
-1.0 -1
2018: 2.6% CAT, 1.9% EA CAT DE EA IT ES FR FR IT DE EA ES CAT

Successful model of High attraction of FDI Strong reduction of

research Best region to invest in unemployment
southern Europe in 2018/2019 30
2nd position in the EU in according to the Financial Times 25
funds received by research 5,000
20
grants (European Research 4,000 15.3
Council, ERC) per person 15
3,000
(2007-2016) 10 11.5
2,000
5 8.2
1,000
• 35% of all Spanish patents 0
0 2006 2008 2010 2012 2014 2016 2018
• 3.2% ERC scholarships while 1994- 1999- 2004- 2009- 2014-
Catalonia Spain
Catalonia accounts for 1.5% of the 1998 2003 2008 2013 2018
Euro area
EU population 5-year average (M€)

4
GDP grows for the 5th year in a row in 2018
GDP growth (%, annual change) GDP growth (%, quarter-on-quarter)
5 1.2

4
1.0
3
2 0.8
1
0 0.6
-1
0.4
-2
-3
0.2
-4
-5 0.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* I II III IV I II III IV I
2017 2018 2019
Catalonia Spain Euro area Catalonia Spain Euro area
*Forecast.
Source: Idescat, INE and Eurostat, . Source: Idescat, INE and Eurostat.

After three consecutive years of over three percent annual growth, growth moderates.

The Catalan economy grew by 0.6% quarterly in 2019Q1, 0.2 points above 4Q2018. It is a positive
sign after 2018 slowdown. The average growth rate in 2018 has been 2.6%, 0.7 points above the EA
average.

A moderate slowdown is projected for 2019 and 2020 (2.2% and 1.9% growth rate, respectively),
more in line with GDP potential growth.
5
Domestic demand continues to drive growth. Strong
performance of the services and construction sectors
Gross Domestic Product in Catalonia
More sustainable growth (% of annual real change)
of domestic demand and 2018 2018 2019
private consumption than in Annual 1st 2nd 3rd 4th 1st
the pre-crisis period. average quarter quarter quarter quarter quarter
GDP 2.6 3.3 2.8 2.5 1.8 2.1
The growth of investment Domestic demand 2.5 2.8 2.7 2.2 2.4 2.1
in capital goods stands Household consumer expenditure 2.0 3.1 1.6 1.7 1.5 1.1
out, which reflects positive Public administration consumer
1.9 2.2 1.4 1.8 2.3 2.8
expectations despite global expenditure1
Gross capital formation2 4.6 2.8 6.9 3.9 4.7 4.1
uncertainty.
Equipment goods and others 4.7 -0.1 8.9 4.2 6.1 4.5
Industry’s sharp decrease Construction 4.2 6.3 4.2 3.5 3.0 3.8
moderates in 2019Q1. External balance3, 4 0.4 0.9 0.4 0.6 -0.2 0.3
4
Industry has moderated its Foreign balance -0.4 0.1 -0.8 -0.3 -0.6 -0.3
growth rates after the post- Exports of goods and services 2.0 4.5 2.2 1.0 0.4 -1.1
crisis expansion (4.8% y-o-y Imports of goods and services 3.6 5.0 5.1 2.1 2.4 -0.3

in 2017). Agriculture -0.4 0.4 0.1 -0.9 -1.2 0.5

Industry 1.1 3.8 2.5 0.8 -2.4 -0.8
Construction 4.7 6.4 3.9 3.5 5.2 5.3
Services 2.9 2.9 3.1 2.9 2.9 3.0
GDP 2.6 3.3 2.8 2.5 1.8 2.1
1 Includes the expenditure consumption by non-profit making institutions at the service of households.
2 Sum of gross fixed capital formation and the stock variation.
3 Includes the foreign balance and the balance w ith the rest of Spain.
4 Contribution to the GDP grow th.
6
Source: Idescat.
An open economy with a high degree of diversification
GVA distribution
(% of total GVA, 2018) Catalonia has a long industrial
Catalonia Spain EA-19 EU-28
tradition. The weight of the
Agriculture, livestock, forestry and fisheries 1.0 2.9 1.7 1.6 manufactures in the total GVA is
1.4 pp. higher than in the EU-28
Industry (mining, manufacturing and energy) 20.7 17.8 20.0 19.6
and 3.7 pp. than in Spain.
Manufacturing 17.7 14.0 17.2 16.3
Construction 5.4 6.5 5.3 5.5 Trade is also an outstanding
Services 73.0 72.8 73.0 73.3 feature of the economy.
Commerce; vehicle repair; transport and
25.7 23.8 19.1 19.1
storage, and hotel
The administrative public sector
Trade and repair of vehicles 1 13.5 12.3 11.1 11.2
has a lower weight compared to
Transportation and storage1 6.3 4.5 4.9 4.9
Accommodation services, food and
that of Spain and the EU.
5.3 7.2 3.1 3.0
beverages 1
Information and communication 4.2 4.2 4.7 5.1
Financial and insurance 3.4 4.0 4.4 4.8
Real estate activities 11.2 10.6 11.2 11.1
Professional, scientific, technical and Services
10.2 8.4 11.3 11.3
administrative 73.0%
Public administration, education, health and
14.2 18.0 18.9 18.5
social services
Arts, entertainment, entertainment and other
4.0 3.8 3.4 3.4
services
1 Catalonia,
2016 data; others, 2017 data.
Source: Idescat and Eurostat.
Industry Agriculture
Construction 20.7% 1.0%
5.4%
7
Economic forecasts point to a more moderate but robust
growth
Macroeconomic forecasts of Catalonia In 2019 and 2020,
2018 2019 (f) 2020 (f) economic growth will
GDP mp variation in volume (%) 2.6 2.2 1.9
Domestic demand contribution to growth 2.2 1.9 1.7 continue, albeit more
Household consumer expenditure variation in volume (%) 2.0 1.9 1.6 moderately.
Public administration consumer
variation in volume (%) 1.9 1.8 1.7
expenditure (1) The forecast for GDP
Gross capital formation (2) variation in volume (%) 4.6 3.0 2.9
External balance contribution to growth 0.4 0.3 0.3
growth in 2019 is 2.2%;
Foreign trade balance contribution to growth -0.4 -0.1 0.1 employment is expected to
Exports of goods and services variation in volume (%) 2.0 2.8 3.5
grow at 1.8% and this
Imports of goods and services variation in volume (%) 3.6 3.6 3.8
Balance with the rest of Spain contribution to growth 0.8 0.4 0.2 should lead to lower
unemployment rates
Employment (3) variation (%) 3.4 1.8 1.1
Unemployment rate (%) unemployed/ active population 11.5 10.2 9.5 (10.2%).
1 Includes
2 Sum
the expenditure consumption by non-profit making institutions at the service of households. Downward risk may
of gross fixed capital formation and the stock variation.
3 Includes the foreign balance and the balance with the rest of Spain.
intensify in 2019: political
4 Contribution to the GDP growth.

Source: Idescat.
uncertainty in Europe may
Note: macroeconomic forecasts by the Ministry of the Vice-presidency , Economy and Finance were released increase (mostly due to
in June 2019.
Brexit) and trade tensions
could heighten.

8
A highly diversified industrial sector
The industry sector grew at a
Industry GVA structure
much more moderate rate in
(% of total industry GVA, 2016)
2018 (1.1%) than in 2017
Chemicals, pharma,
8.6 plastics and refining (4.8%). This sector is the most
Energy, water and exposed to foreign trade
5.0
25.9 sanitation tensions, which in 2018 have
Food, beverages and generated a slowdown in foreign
5.7
tobacco trade growth.
Equipment and Its growth rate in 2018 is 0.1
machinery
8.2 points lower than the EA
Metals
average. Germany has
particularly suffered a slow
Transport materials
down in industry (0,7%) in 2018.
8.7 Timber, paper and In 2019Q1, industry GVA in
15.0 graphic arts Catalonia decreased by -0.8%.
Textile, leather and This slowdown is much lower
footwear than the sharp decline in
9.4
Others 2018Q4.
13.5
Employment in the high and
Source: Idescat. medium-high technology
industry represents 6.8% of
total employment, higher than in
Italy (6.1%), France (4.2%), and
Spain (4.1%).
9
Exports kept growing in 2018, amidst global trade
tensions
Trade balance in goods and services in Catalonia (% of GDP)
14
12 12.2
10
8 5.7 6.5
6
4
2
0
-2
-4
-6
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Balance with foreign countries Balance with Spain External balance
Source: Idescat.
Exports of goods by destination (% of total)
In 2018, Catalonia’s trade surplus was 65 65
12.2% of GDP. Surplus with foreign countries 64
60 61
and the rest of Spain had similar dimensions. 57 57
59
55 54 54
65% of goods were exported abroad, while 52 53
35% were exported to Spain. The EU-28 is 50
50 47
48
the main destination of foreign Catalan 45
46
46
43
exports: 64.6% of the total in 2018. Outside 40
43 41
39
the EU, remarkable increase of exports 36
35 35
towards the USA, China and Japan. 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
abroad to Spain

Source: C-Intereg and Idescat. 10

Tourism is a driving force of the Catalan economy
Foreig tourism trends
(2005=100) Tourism figures were at all-time
250 highs in 2018, both in terms of foreign
200 tourist arrivals and their expenditure.
150 Catalonia received over 19 million
100 foreign tourists in 2018, same
50
amount than in 2017, However total
expenditure was 20,606 million euros,
7.2% higher than in 2017.
Number of tourists Total expenditure Barcelona is the 1st city in the world
Source: INE in number of participants and the 4th
city to host international congresses
Tourism demand in Catalonia (2018) (ICCA, 2018). It is also among the
Tourists Expenditure leading cities in scientific or business
Millions of annual % Millions annual % conventions and trade fairs linked to
trips change of euros change strategic activities such as ICT or the
Catalonia1 20.5 0.0 2,238 6.6 medical sector.
Rest of Spain 4.8 -6.2 1,787 -6.0 Barcelona is the 1st cruise port in
Foreign tourism 19.1 2.0 20,606 7.2 the Mediterranean and the 4th in the
Total 44.4 0.2 24,631 6.1 world. In 2018, 3 million cruise
1It does not include travel to homeow nership. passengers were arrived.
Source: INE.

11
 Positive developments in the labour market
Social Security Affiliations (% annual change) In 2018, Social Security affiliations grew by
6
3% and LFS employment grew by 2.7%.
3.5% 3.7% 3,8%
4 During 2008-2013 the number of
affiliations fell by an annual -3.2% 3.0%
Growth remains robust but is slightly lower than
2 in the last three years. Employment grew
significantly in construction and services.
0

-2
Unemployment rate has decreased to 11.6%
(2019Q1).
-4
The employment rate stood in 2018 at
-6
67.9%, similar to the EA level (67.3%). Higher
-8
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
unemployment in Catalonia is mainly due to a
Source: Ministry of Employment and Social Security. higher proportion of active population.

Unemployment rate (% unemployed/active population) Percentage of working age population (15-64 years), 2018
100
30
23.2 % 26.6 %
25 80

8.9 % 6.1 %
20 23.1
60
20.3
15 18.6
15.7 40
10 13.4 11.5
11.6 67.9 % 67.3 %
5 20

0
00
2007 2009 2011 2013 2015 2017 2019Q1 Catalonia Euro area

Catalonia Spain Euro area % of inactive people % of unemployed % of employed people (employment rate)

Source: Idescat, INE and Eurostat. Source: compilation based on data from Idescat and Eurostat. 12
Agenda

1. Key economic drivers of Catalonia

2. Fiscal rebalancing

3. Debt and treasury overview

Fiscal consolidation
Budget balance evolution
Deficit evolution and prospect (% of GDP)
0 0.00
-0.10
-0.24 -0.56 -0.44
-1 -0.60
-0.91
-2.66
-2 -2.52
-2.33 -2.15
-2.52 -2.27
-3 -2.66* -2.84*

-4 -4.21

-4.11
-4.48*
-5

-6
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
out. out. out. out. out. out. out. out. out. out. out. out. out.
Deficit
* Including one-off adjustments targets

Fiscal consolidation is a priority for the Catalan Government. The public accounts are being
rebalanced under the principles of efficiency and sustainability.
From 2010 Catalonia has reduced its deficit from 4.48% of GDP in 2010 to 0.44% of GDP in 2018
(8,075 M€ in 7 years).

14
Budget balance
The structural budget deficit has reduced 2.86 GDP points (from 3.46% in 2010 to 0.60% in
2018). The structural budget annual average reduction has been 0.36 points.
The effort to reduce the deficit was 8,075 M€ (-89%) between 2010 and 2018.
1,0
0.32 0.25 0.31
0,0
-0.08 -0.09
-0.28
-0.36 -0.33 -0.44
-1,0 -0.56 -0.56 -0.22 -0.54 -0.60
-0.86 -0.94 -0.83 -0.91
-1.20
% GDP

-1.28
-2,0
-1.86
-2.24 -2.27 -2.15
-3,0 -2.66 -0.67
-2.95 -3.10 -2.83
-1.13
-3.46 -3.10
-4,0
-1.89
-3.72 -4.11
-4.48
-5,0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Actual balance Cyclically-adjusted budget balance Structural budget balance Structural primary balance

2010 2011 2012 2013 2014 2015 2016 2017 2018 Variation
Outturn Outturn Outturn Outturn Outturn Outturn Outturn Outurn Outurn 2018-2010
Amount %
Actua l ba la nce -9,100 -8,219 -4,437 -4,144 -5,233 -5,832 -1,939 -1,244 -1,025 8,075 -89%
Cycli ca ll y-a djus ted budget ba la nce -7,571 -6,201 -1,688 -1,085 -2,464 -7,803 -741 -706 -1,247 6,324 -84%
Structura l budget ba l a nce * -7,033 -6,201 -3,627 -1,593 -2,288 -6,249 -553 -895 -1,378 5,655 -80%
Structura l pri ma ry ba la nce -5,997 -4,490 -1,844 617 -91 -5,296 569 300 -205 5,792 -97%
* Cycli ca ll y-a djus ted budget ba l a nce excluding one-off a nd other tempora ry mea s ures .
Calculations based on the Spanish Economy Situation Report data, published by Ministry of Economy and
Competitiveness. Source: Compilation based on IGAE (State Government Comptroller's Office) data. SEC 2010.
15
Fiscal consolidation measures
Revenue measures
Million €
2012 2013 2014 2015 2016 2017 2018
In 2018, the revenue
Recurrent
1
515 882 1,594 1,096 1,126 1,279 1,399 measures were 1,399 M€,
Non recurrent
2
1,358 212 331 0 0 0 0 0.6 GDP points.
Non-financial revenues increase 9,3% 5,5% 9,6% 5,4% 5,0% 5,3% 5,6%
% GDP 1,0% 0,6% 1,0% 0,5% 0,5% 0,6% 0,6%
Revenue measures 1,873 1,094 1,925 1,096 1.126 1,279 1,399
1
Wi thout revenues from mea s ures decl ared uncons tituti onal
Between 2010 and 2016,
2
Wi thout addi tiona l mea s ures current expenditures
were reduced 1,414 M€
Expenditure measures
Million € (5.9%).
2010 2018 Variation 2010-2018
M€ %
Employees compensation 7,547 7,783 236 3.1
Current expenditures on goods and services 7,971 8,637 666 8.4 The accrued expenditures
Current transfers 8,443 7,914 -529 -6.3 without interests have been
Current expenditures 23,961 24,334 374 1.6
Real investments 1,176 444 -732 -62.2 reduced 1,016 M€ (3.9%).
Capital transfers 1,133 474 -658 -58.1
Capital expenditures 2,308 918 -1,390 -60.2
Accrued expenditures without interests 26,269 25,253 -1,016 -3.9
Entities result
1
-1,718 138 1,856 -
The total adjustment has
Other expenditures displaced
2
-406 0 406 - been 3,278 M€, 1.4 GDP
Total adjustment -3,278 points.
% GDP -1.4
1
Capital contributions included
2
Displaced expenditures not imputed by chapters

16
Fiscal consolidation – Tax measures
Recurrent revenue measures. M€
Settlement
Tax measures
2012 2013 2014 2015 2016 2017 2018
Tax on wealth (recovery and increase of taxation) 305.0 562.7 431.3 461.7 495.5 511.4 534.1
Increase in tax rates on documented legal acts 40.5 45.6 49.0 63.5 68.7 103.9 111.7
Increase in the rates of the autonomous section of the hydrocarbon tax 60.8 139.0 109.1 106.0 107.1 107.5 106.7
Increase in property tax rates -- 35.0 174.7 199.4 226.7 274.0 283.9
Reform of inheritance tax -- -- 45.2 130.5 119.8 114.6 120.2
Reform of the civil protection levy -- -- -- -- 0.2 0.2 0.2
Taxation on gambling -- -- -- -- -- 12.6 13.3
Increase in the rates of the income tax for high levels of income 57.8 57.9 55.3 52.7 58.0 73.3 86.4
Reform of shopping center tax -- -- -- -- -- -- 8.7
Modification of taxes 464.0 840.2 864.5 1,013.9 1,076.1 1,197.5 1,265.2
Judicial fees 5.1 2.1 0.0 2.3 2.7 3.5 --
Tax on stays in tourist establishments -- 35.2 41.0 43.2 47.6 52.5 60.9
Tax on the emission of gases and particles into the atmosphere -- -- -- 0.1 1.0 0.9 0.4
Tax on pollutant emissions of nitrogen oxides into the atmosphere from
commercial aviation -- -- -- -- 3.0 3.2 4.3
(1)
Tax on empty housing -- -- -- -- 11.5 18.4 16.3
Tax on beverages with excess sugar -- -- -- -- -- 22.7 41.9
Environmental risk tax on the production, handling and transport, custody
and emission of radioactive elements -- -- -- -- -- 7.4 9.9
Creation of new taxes 5.1 37.3 41.0 45.6 65.8 108.6 133.7
Total tax measures 469.1 877.5 905.5 1,059.5 1,141.9 1,306.0 1,398.9
Pharmaceutical prescription or product tax 45.6 4.3 0.0 -0.9 -2.3 -- --
Tax on deposits of credit institutions -- -- 688.3 -- -- -- --
Tax on the provision of content by providers of electronic communication
services -- -- -- 7.3 18.4 -27.4 -0.1
Tax on the production of electrical energy of nuclear origin 30.3 -32.3 0.0
Declared unconstitutional 45.6 4.3 688.3 36.6 -16.1 -27.4 -0.1
Global tax measures 514.7 881.9 1593.8 1,096.1 1,125.8 1,278.6 1,398.9
(1)
Pending res ol uti on of the a ppea l fi l ed by the Sta te before the Cons ti tutiona l Court.

17
Evolution of public sector entities and job positions
Public sector entities included in the budget 2011 2012 2014 2015 2017 2019*
Generalitat 1 1 1 1 1 1
CatSalut, ICS, i ICASS 3 3 3 - - -
Aut. admin. entities and Catalan Healthcare Service 25 23 19 20 20 20
Autonomous commercial and financial entities 5 3 2 2 2 2
Public law companies 46 47 43 44 44 45
Trading companies 52 47 30 26 27 27
Consortiums 62 61 50 50 54 62
Foundations 46 43 35 37 34 34
Total public sector entities 240 228 183 180 182 191
Total other entities non-majority shareholding 28 26 26 24 19 6
Consortium non-majority shareholding2 - - - - 2 5
Total entities 268 254 209 204 203 202

Job positions included in the public sector consolidated budget 2011 2017 2019* -66 entities
Executive and consulting personnel 549 566 583 (-24.6%
compared
Civil servants 168,113 166,392 173,122 to 2011)
Private regulation personnel 62,351 60,620 66,785
Total public sector 231,013 227,578 240,490
* 2019 budget draft

+9.477 (+4.1%) job positions compared to 2011 18

Budgeting goals, practices and tools

PUBLIC EXPENDITURE BUDGET TOOLS

MANAGEMENT GOALS

Medium- Term Budget

Frameworks and Top-
Aggregate fiscal

Down budgeting
discipline

Spending Reviews

Budget transparency

Capacity building
Performance budgeting

Policy Evaluation
Allocative efficiency

Operational efficiency
and effectiveness

Monitoring

19
Budget reforms to improve expenditure management

New impulse of the performance-based budgeting reform (started in 2006)

Reinforcement of the medium-term budgeting frameworks in the annual

budget elaboration process

Spending Review Process: started in 2017 review of program expenditures of

all policies

Boosting the evaluation of public policies to provide evidence for budget

decisions (economic evaluation of initiatives, capital projects…)

Increased transparency and dissemination of budget information (new

graphical and navigable budget tools, improved budget execution information
and open data)

20
Public sector administration
Revenue
Mi l l i on €
Var 2018/2017
Chapter Outturn 2017 Outturn 2018
M€ %
1. Direct taxes 10,153 10,663 511 5,0
2. Indirect taxes 11,662 12,533 871 7,5
3. Fees, sales and other revenue 789 782 -7 -0,9
4. Current transfers ¹ 1,350 714 -636 -47,1
5. Property revenue 60 56 -3 -5,6
Current revenue 24,013 24,749 736 3,1
6. Real investment disposal 9 19 10 111,2
7. Capital transfers 114 187 74 65,1
Capital revenue 123 206 84 68,5
Non-financial revenue 24,136 24,956 820 3,4
8. Financial assets 198 131 -68 -34,1
Total revenue 1 to 8 24,334 25,086 752 44,5
9. Financial liabilities (total borrowing) 8,412 12,154 3,743 42,7
Total revenue 1 to 9 32,746 37,241 4,495 13,7
(1) It does not include Loca l governments s hare of Centra l Government's revenue nei ther European
Agri cul tura l Guara ntee Fund (EAGF)

21
Public sector administration
Expenditure
Mi l l ion €
Var 2018/2017
Chapter Outturn 2017 Outturn 2018
M€ %
1. Employee compensation 7,450 7,762 312 4.2
2. Current expend. on goods and services ¹ 8,253 8,354 100 1.2
3. Interest and financial fees 792 850 57 7.3
4. Current transfers ¹ 7,751 7,876 124 1.6
5. Contingency fund 0 0 0 0.0
Current expenditures 24,247 24,841 594 2.4
6. Real investments 488 448 -40 -8.1
7. Capital transfers 514 468 -46 -9.0
Capital expenditures 1,002 916 -86 -8.6
Non-financial expenditures 25,249 25,757 508 -2.0
8. Financial assets ² 746 686 -60 -8.1
Total expenditures chapters 1 to 8 25,995 26,443 448 1.7
9. Financial liabilities (debt repayment) 5,207 11 5,403 103.8
Total expenditure chapters 1 to 9 31,202 37,053 5,851 18.8
(1) It does not i ncl ude Loca l governments s ha re of Centra l Government's revenue nei ther Europea n
Agri cul tura l Gua ra ntee Fund (EAGF).
(2) Equi ty contri buti ons to publ i c s ector enti ti es , gra nted l oa ns a nd a cqui s i ti on of other fi na ncia l a s s ets .

22
Structural adjustment by level of administration

Autonomous communities concentrate 43.53% of the 2010-2018 adjustment, above their

public expenditure contribution (32.35%).
Central and Social Security System administrations participate 40.03% on the deficit
reduction.
Government of Catalonia’s effort represents 11.17% of the total deficit reduction. This
percentage is 5.48 percentage points higher than its share to the total public spending.

Subsectors Financing Capacity (+)/Need (-)

2010 2018 Adjustment 2010-2018 (1)
2018
% GDP % GDP % GDP M€ €/inh. Adjustment Public spending
distribution (%) distribution (%)
Total Public Administrations (TPA) -9.46 -2.48 6.98 72,272 1,547 100.00 100.00
Central and Social security system adm. (CSSA) -5.77 -2.48 3.00 28,927 619 40.03 56.25
Central Administration -5.54 2.76 4.19 43,582 933 60.30 22.70
Social security system administration -0.23 -1.35 -1.19 -14,655 -314 -20.28 33.55
Autonomous communities (AC) -3.17 -0.23 2.94 31,461 673 43.53 32.35
Local government (LG) -0.52 0.52 1.04 11,884 254 16.44 11.51

Government of Catalonia -4.48 -0.44 4.04 8,075 1,062 11.17 5.69

(1)
Non fi na nci a l publ i c expendi tures , excludi ng Sta te a i d to fina nci a l i ns ti tuti ons
Source: Compi la ti on ba s ed on IGAE (Sta te Government Comptrol l er's Offi ce) da ta . ESA 2010

23
Non-financial balance

Principal budgetary features of liquidated budget of the Administrative Public Sector* of the Generalitat of Catalonia

(Li qui da ted budgets i n mi l l i on euros )

2015 2016 2017 2018
Current revenue 20.002 22.192 24.021 24.749
Current expenditure 24.345 23.004 24.254 24.841
Gross inflow -4.343 -811 -233 -92
Primary Gross Inflow (excluding Interest) -3.140 -229 559 758
Gross Inflow / Current revenue (%) -21,7% -3,7% -1,0% -0,4%
Capital income 233 194 123 206
Capital expenditure 1.227 1.069 1.002 916
Net Capital Balance -994 -875 -879 -710
Non-financial income 20.235 22.387 24.143 24.956
Non-financial expenditure 25.572 24.073 25.255 25.757
Non-financial balance -5.337 -1.686 -1.112 -802
Non-financial balance / Current revenue (%) -26,7% -7,6% -4,6% -3,2%
Primary balance (excluding Interest) -4.135 -1.104 -320 48

* Admi ni s tra ti on of the Genera l i ta t, Ca ta l a n Hea l th Servi ce, Ca ta l a n Hea l th Ins ti tute a nd a utonomous a dmi ni s tra ti ve bodi es . Sta rti ng from 2015, i t
does not i ncl ude the Ca ta l a n Hea l th Ins ti tute beca us e i t ha s become a publ i c-l a w body.

24
Spanish Fiscal Deficit can only be understood under a
consolidated view
Regional revenues based on a complex and unbalanced financing model
Financial analysts can not spend enough time to understand it.
And in any case it is not a sustainable framework and has to be renegotiated.

While regional expense basis is strongly influenced by the “basic legislation”

set by central Government
Universal and free education and health care is a basic right which can not be
changed at Regional Level.
Many rigid regulations in Social Welfare (dependencia), environment, labor
regulations, wage increases…

So the central Government has the power to decide:

The share of resources allocated to Regions (over 90% of our revenues).
Mandatory levels of the welfare society: Constraint over 90% of our cost.
Legal changes to enable public sector restructuring.

Catalonia does not have a structural financial problem

Regional public expenses are below the Spanish average in PPP.
Regional tax collection is well above the Spanish average.

25
Agenda

1. Key economic drivers of Catalonia

2. Fiscal rebalancing

3. Debt and treasury overview

Current debt portfolio
OUTSTANDING DEBT
JUNE 2019 (P)
General Admin. 72,364 M€

ESA Entities 6,854 M€

TOTAL 79,218 M€

Liquidity Mechanisms 58,986 M€

Liq.Mech. / Total Debt 74.5%

Source: Generalitat de Catalunya. Provisional data.

GENERALITAT’S
07/22/2019
RATING
DBRS BB high (stable)
Fitch BB (stable)
Moody’s Ba3 (stable)

27
Moving towards a more balanced debt portfolio

In the period 2011-2018, Generalitat has

reduced its short-term and floating debt.

In the 4Q 2018, Generalitat refinanced

2,774 Million € of short-term debt
through long term operations, following
the authorization of the Spanish
Government.

This change in the debt structure makes

Generalitat less vulnerable to interest-
rate and refinancing risks.

Liquidity mechanisms will allow

Generalitat to move on in the same
direction in 2019.

28
Debt repayments
LONG TERM DEBT REPAYMENTS - GENERALITAT DE CATALUNYA
SITUATION AS OF 06/30/2019
Million €
11,000
Million €
MONTHLY National Foreign Liquidity
Bonds TOTAL
10,000 REPAYMENTS Loans* Loans Mechanisms
July 2019 3 23 989 1,015
9,000 August 2019 3 2 23 27
September 2019 14 14 182 210
8,000
October 2019 21 10 833 864
November 2019 9 65 23 97
7,000
December 2019 60 44 182 286
6,000 TOTAL 2H 2019 0 110 157 2,232 2,499
* National loan repayments include 27M€ of PPP.
5,000

4,000
Average Life = 4.29 years
3,000

2,000

1,000

Bonds Loans Liquidity Mechanisms

Million €
SHORT TERM OUTSTANDING DEBT 06/30/2019
Loans & C.Lines (Million €) 1,912
29
Liquidity mechanisms
CATALONIA
TOTAL CCAA
Initial amount Outstanding amount (06/30/19) Current cost
ICO financial maturities 5.397 1.304 0 -
Suppliers payment fund (Part 1) 17.705 2.020 1.010 0,834%
FLA 2012 16.638 6.665 4.166 0,834%
TOTAL 2012 39.740 9.989 5.175
FLA 2013 22.921 10.815 5.407 0,834%
Suppliers payment fund (Part 2) 939 738 484 0,834%
Suppliers payment fund (Part 3 - 1st Tranche) 3.606 1.489 837 0,834%
TOTAL 2013 27.465 13.041 6.729
Suppliers payment fund (Part 3 - 2nd Tranche) 7.970 2.306 1.369 0,834%
FLA 2014 23.215 7.913 5.935 0,834%
TOTAL 2014 31.185 10.219 7.304
Financial Facility 2015 14.267 0 0 -
FLA 2015 22.830 11.292 8.469 0,834%
Social Fund 2015 683 397 298 0,834%
TOTAL 2015 37.781 11.689 8.767
Financial Facility 2016 2.999 0 0 -
FLA 2016 28.182 10.069 8.810 0,500%
TOTAL 2016 31.181 10.069 8.810
Financial Facility 2017 3.634 0 0 -
FLA 2017 23.960 7.748 7.748 0,849%
TOTAL 2017 27.594 7.748 7.748
Financial Facility 2018 9.280 0 0 -
FLA 2018 20.648 9.435 9.373 0,846%
TOTAL 2018 29.928 9.435 9.373
Financial Facility 2019 (1Q+2Q+3Q) 11.820 6.534 5.081 0.981% (P)
FLA 2019 (1Q+2Q+3Q) 9.520 0 0 -
TOTAL 2019 (1Q+2Q+3Q) 21.339 6.534 5.081
TOTAL 58.986 30
2018 needs and strategy
2018 Funding Needs Million € 2018 Funding Strategy Million €
Non-financial needs 1,058 2018 Deficit goal
933
2018 Deficit goal (0.4% of GDP) 933 (0.4% of GDP)
Devolution 2008-09 neg. liq. of fin. system 125
Dev. 2008-09
125
2018 Maturities (Generalitat) 7,884 FLA 2018 9,373 neg.liq. of fin.system
Long term loans 6,194 2018 Maturities
· Liquidity Mechanisms 5,454 (bonds; long term
8,315
· Foreign Banks 310 loans; liquidity
· Spanish Banks1 397 mechanisms; others)
· PPP 33
Bonds 1,690

2018 Maturities (ESA Entities) 432

Long term loans 432
· Foreign Banks 138
Fully received
· Spanish Banks1 254
· PPP 39

2018 GLOBAL GROSS NEEDS 9,373

Note 1: 2018 maturities do not include the roll-over of the short
term debt with Spanish banks .

• Long-term maturities were refinanced through FLA 2018.

• In the 4Q 2018, Generalitat signed 2,774 Million € of long-term loans to refinance some
short-term debt, following the authorization of the Spanish Government.
31
Treasury needs are currently managed through the
liquidity mechanisms

Historical non-financed deficits have been fixed via Suppliers

Payment Fund and FLA.

Ongoing financial needs

– Deficit will be covered by existing FFCA
– Maturities from bonds, long term loans and liquidity mechanisms will
be covered by FFCA
– Short term maturities with local banks are rolled over under the
framework of “Principle of Financial Prudence”

32
Evolution of funding needs
Other 125
Liq. Mechanisms 6,713
LT National Loans 537
LT Foreign Loans 430
LT Bonds 0
Deficit (0.1% GDP) 242

TOTAL 2019 (F) 8,047

33
2019 needs and strategy
2019 Funding Needs (estimate) Million € 2019 Funding Strategy (estimate) Million €
Non-financial needs 367
2019 Deficit goal
2019 Deficit goal (0.1% of GDP) 242 242
(0.1% of GDP)
Devolution 2008-09 neg. liq. of fin. system 125

Financial 2019 Maturities

2019 Maturities (Generalitat) 7,225
Facility 8,047 (bonds; long term
Long term loans 7,225 7,680
loans; liquidity
· Liquidity Mechanisms 6,713 2019
mechanisms; others)
· Foreign Banks 296
· Spanish Banks1 190
125 Others
· PPP 27
Bonds 0

2019 Maturities (ESA Entities) 455

Long term loans 455
· Foreign Banks 135
· Spanish Banks 234
· PPP 87

2019 GLOBAL GROSS NEEDS 8,047

Note 1: 2019 maturities do not include the roll-over of the short
term debt with Spanish banks .

34
DISCLAIMER
This presentation has been prepared by Generalitat de Catalunya.
The information contained in this presentation is elaborated based on the present
political situation and the existing legal and financial framework and must be read in
conjunction with all other publicly available information regarding Generalitat de
Catalunya. Each user of this presentation must make its own study and shall
independently evaluate and judge the relevance of the information contained herein.
This presentation is not intended to provide investment or financial advice, nor does it
constitute a recommendation to purchase, sell or hold notes issued by Generalitat de
Catalunya.

CONTACT:
economia.gencat.cat
inversors.eco@gencat.cat

35
gencat.cat