THE crisis in Catalonia and uncertainty over its independence bid have led a credit ratings agency to warn that its economy is being hurt and could affect public finances in Spain.

DBRS said the political turmoil brought on by the stand-off with Spain’s central government “is discouraging investment and tourism in the region”.

Catalonia represents about a fifth of Spain’s annual gross domestic product (GDP) and any slowdown in the state would impact on the national economy. The Spanish government has revised downwards its growth forecast for 2018 to 2.3 per cent from 2.6 per cent, largely because of doubts over the future of the north-eastern state.

DBRS said, however, that the effects on the national economy would be “manageable”, unless the crisis became protracted.

Ethical ratings agency Standard Ethics (SE), meanwhile, has downgraded Spain’s rating from “EEE-” to “EE+” because of the Catalan issue.

SE said its decision emanated from the opinion that the government and the Spanish parliament had not yet identified a long-term sustainable approach in relation to the crisis.

The agency did not intend to question the fact that the independence process — initiated by the October 1 referendum — was a non-constitutional process. It also appeared to be a “non-democratic procedure”, because the poll was declared illegal, “without proper guarantees of the regularity of the vote and with no quorum, which would have been necessary for its popular legitimacy”. It said the negative assessment did not question that Catalan institutions had been acting against Spanish law.

“Rather, it intends to highlight the poor sustainability of the Spanish policy line adopted in recent years in managing the legitimate autonomous demands of the region of Catalonia,” SE said.

“A non-forward-looking political strategy that has produced clear divisions and severe tensions within the kingdom. A strategy that does not appear under review.”