Spain | Regional Economic Outlook. June 2025

Summary

Growth remains solid, but in a context of deceleration. In 2025, services exports remain the main growth driver. In 2026, the impact of tariffs and the slowdown in non-resident consumption will lead to a moderation in growth.

Key points

• Key points:
• In 2025, the Spanish economy will maintain solid growth (2.5 %). Exports of services, including tourism, continue to evolve favorably, while exports of goods are affected by increased uncertainty. The Balearic Islands, the Canary Islands and Valencia, supported by policies to recover activity after the dana, will grow by more than 3.0%.
• The deterioration observed in the evolution of exports of goods in several northern communities and their greater exposure to increased uncertainty over trade policy explains a worsening of GDP growth forecasts to 1.8% in Asturias and Cantabria, 1.9% in Aragón, 2.0% in Castilla y León, 2.2% in Navarra, and 2.3% in the Basque Country and Galicia.The lower dynamism of consumption, especially public consumption, will have an impact on the southern communities. However, the lower weight of goods exports softens the downward revisions in these regions.
• Spain's GDP in 2026 is revised down by -0.1pp to 1.7% due to tariff and economic policy uncertainty, the depletion of some demand drivers such as services exports and some bottlenecks.
• Trade policy uncertainty mostly affects northern industrial communities in 2026 and those with more exposure to the US.
• The lower dynamism of consumption by non-residents but also by nationals justifies that the islands will no longer lead growth next year.

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