Published on Tuesday, October 24, 2023

Spain | Andalusia Economic Outlook. Second Half 2023

The GDP of Andalusia will grow by 2.1% in 2023 and 1.8% in 2024. This will allow the creation of 155 thousand jobs in the two-year period and reduce the unemployment rate to 18.3% in 2024.

Key points

  • Key points:
  • At the beginning of the year, external demand, particularly in services, has benefited the Andalusian economy and has compensated for the negative evolution of agriculture. The Costa del Sol has been the most benefited region.
  • But it is already observed in job creation and there is a downward bias in the forecasts. The consumption of Andalusian households seems to be slowing down, restricted by high interest rates, which will remain for a long period of time.
  • Supply problems are perceived in certain sectors that limit growth: food exports and industrial production of consumer goods are reduced, affected by the drought. Visas for new residential construction show stagnation. Spending by foreigners moderates their contribution and their ability to contribute to growth may be exhausting.
  • The recovery can continue thanks to the strength of the balance sheet of households and families, to the normalization that can be observed in agricultural and industrial activity if there is a normal year of rains, to the support that the acceleration in the implementation of funds can provide. Europeans and the increase in the working-age population (which is increasing more than in the rest of Spain thanks to both immigration and the higher participation rate of Andalusians).

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