Economy of Gibraltar - Interaction With The Nearby Area

Interaction With The Nearby Area

In September 2009 the Gibraltar Chamber of Commerce released an Economic impact study and analysis of the economies of Gibraltar and the Campo de Gibraltar produced by Professor John Fletcher of Bournemouth University. The report aimed at clarifying the effects of Gibraltar's economy on the Campo area. It demonstrated that Gibraltar's economy has a significant and very positive economic impact on the Campo de Gibraltar. It also noted that the Campo region played a "significant role in Gibraltar's economic development as well", concluding that "oth economies and societies would be the poorer without the other..."

Its conclusions were:

• The Gibraltar economy has a significant and positive economic impact on the Campo de Gibraltar region when considered from the point of view of net recurrent expenditure.

• In 2007 Gibraltar businesses imported more than £174m of goods and services from Spain (excluding petroleum imports).

• Spanish frontier workers earned almost 243m in 2007 and this money was repatriated and spent in the Campo de Gibraltar region to generate further rounds of economic activity.

• Other frontier workers (excluding Spanish and Gibraltarian) earned £82.8m from within the economy of Gibraltar.

• The number of jobs supported by the Gibraltar economy (within Gibraltar) is equivalent to 18% of the total 102,468 jobs recorded in the Campo de Gibraltar region in 2007.

• Residents of Gibraltar spent almost £30m on shopping, food and other goods and services, in Spain, during 2007.

• Gibraltarians with second homes in the Campo de Gibraltar spent more than £33.5m in the Spanish economy during 2007.

• Gibraltar's economy increased the level of output in the Campo de Gibraltar in 2007 by £301.745m. Total visitor spending in Gibraltar in 2007 was £230.6m of which £176m was by visitors across the land frontier. Of this £176m land frontier visitor expenditure, some £112.4m was attributable to Campo de Gibraltar residents and a further £21.27m is assumed to be displacement from the Spanish economy, leaving a total net direct output effect of £168m from recurrent spending (£302m-£134m).

• In 2007 the £302m direct output effect of the Gibraltar economy on the Campo de Gibraltar economy was responsible for a direct increase in Gross Domestic Product (GDP) within the Campo de Gibraltar region of £195m.

• Using the Andalusia Regional Input-Output model to estimate the secondary effects of the two economies' interaction, the Gibraltar economy was responsible for a further increase in GDP in the Campo de Gibraltar region of £125m, resulting in a total increase in GDP of just over £420m.

• The Gibraltar economy was responsible for approximately 12.2% of the total GDP in the Campo de Gibraltar in 2007.

• In terms of a further wealth effect created by the Gibraltar economy, the evidence would seem to suggest that property values within the Campo de Gibraltar region have increased by up to 40% because of the proximity to Gibraltar. With just over 86,000 households in the region and using a conservative property value (at 2007 prices) this could account for an increase in Campo de Gibraltar asset values of somewhere between £1.4 to £5.4 billion. The reason for such large variation is explained partly through the lack of data that are available without undertaking a detailed survey and partly because of the volatility experienced by the Spanish housing market over the past year, where property prices, particularly in some areas, have fallen dramatically. In part this fall in property prices is explained by the general economic downturn being experienced by the global economy and in part by the effect of the falling pound sterling with respect to the value of the euro which will have put further downward pressure on property prices in the region.

• Gibraltar also imported approximately 1.5m tonnes of petroleum products from the Campo de Gibraltar region for bunkering during 2007 and the value of this has not been included in the analyses. If the value of this fuel is included as an import from the Campo de Gibraltar it adds almost another £300m to the impact of Gibraltar on the region, .