Spain | Castilla-La Mancha Economic Outlook 2025

Summary

Castilla-La Mancha's GDP could have increased by 3.4% in 2024 (Spain 3.2%). Regional GDP is expected to increase by 2.8% in 2025 and 1.6% in 2026. If these forecasts are met, the unemployment rate could fall to 11.6% on average in 2026 and 40,000 new jobs could be created in the 2025-2026 biennium.

Key points

• Key points:
• After a sharp slowdown at the end of 2023, the economy is expected to recover at the beginning of 2024, driven by the impulse of the public sector, trade, manufacturing, professional activities and the gradual normalization of the weather situation.
• The strength of demand is sustained by the support of foreign spending, in a context of an increase in the importance of domestic demand. The recovery of agricultural activity, in turn, boosts exports of goods, but so do raw materials, automobiles and consumer manufactures with a positive drag effect on industrial production, which exceeds 2019 levels.
• Immigration is contributing to the increase in the active population and employment. Between 2021 and 2024, immigrants have covered half of the 51 thousand jobs created in the region (45% in Spain).
• Growth will continue to be supported in part by tourism, thanks to high productivity gains in services and the capacity to create jobs. In addition, the reversal of the effects of the drought will benefit agricultural activity and exports. Inflation is expected to be close to 2%, thanks to the fall in fuel prices, which will allow wages to recover purchasing power and the reduction in interest rates to continue, boosting consumption and investment.
• The outlook is conditioned by a particularly uncertain environment dependent on the global context. Nevertheless, by the end of 2026, regional GDP could be 11.4 points above the 2019 level measured in real terms.

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