Spain | Andalucia Economic Outlook. First Half 2025

Summary

In 2024, the GPD of Andalusia could have grown by 3.1%, and is expected to increase by 3.0% in 2025 and 1.6% in 2026. This strength is due to the robust performance of tourism, which is reaching capacity limits, as well as the domestic demand, where consumer spending has been increasing its weight.

Key points

• Key points:
• If these forecasts are met, the unemployment rate in 2026 could fall to 14.2% on average in 2026, and 153,000 new jobs could be created in the 2025-2026 biennium.
• The dynamism of employment affiliation was concentrated in Malaga and Sevilla driven by the strength of the services sector, although the weak performance of agricultural enrollment slows growth in non-urban areas.
• Industry and exports show signs of recovery, driven by the rebound in the agri-food sector. Economic activity is also positively supported by public spending.
• Lack of investment, particularly in the housing market, is a bottleneck to growth. Rising labor costs may slow job creation. Aging restricts the contribution of household consumption, slows labor market participation and increases dependence on immigration, which is concentrated in low-productivity jobs.
• Tourism faces concerns related to stagnant European demand, along with possible changes in German fiscal policy and the impact of potential tariff increases by the U.S, changes in energy costs and general economic policy uncertainty.

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