Spain | Comunitat Valenciana Economic Outlook. Second Half 2025

Summary

In 2025, the GDP of the Valencian Community could grow by 3.6% and is expected to increase by 2.9% in 2026, leading growth in both years. Looking ahead, economic activity will be marked by high uncertainty surrounding economic and tariff policy and the slow recovery in Europe.

Key points

• Key points:
• The growth in regional membership is accelerating in annual terms and is above the national average. Valencia and its urban area, in particular, are showing solid growth. Recovery after the storm is faster than anticipated, and support measures are driving investment and construction in particular.
• Added to this is the positive performance of tourism service exports and private consumption. Meanwhile, public spending is slowing down, while exports of goods and the non-energy industry are falling.
• Among the factors that will support growth are measures to support those affected by the storm, falling oil and gas prices, a more expansionary economic policy in Europe, and greater growth capacity in the service sector (due to immigration and increases in hourly productivity).
• Risks to growth persist due to economic policy uncertainty in the US, tourism restrictions, the waning impact of aid, structural changes in the automotive sector, housing and labor shortages, and the need for agreements on regional debt.
• By the end of 2026, GDP could be 15 points higher than in 2019 (13pp in Spain), making it the second-best performing region after Madrid. If these forecasts are met, the unemployment rate could fall to an average of 11.5% in 2026 and 113,000 new jobs could be created in the 2025-2026 period.

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