Spain | Extremadura Economic Outlook 2025

Summary

In 2024, Extremadura's GDP could have grown by 2.9%, and it is expected to increase by 2.1% in 2025 and 1.5% in 2026. Looking ahead, economic activity will be marked by high uncertainty surrounding economic and trade policy and the slow recovery in Europe.

Key points

• Key points:
• Extremadura's GDP appears to be showing solid growth, above the rest of the eurozone. Employment is increasing in urban areas, although rural areas continue to lag behind due to the lack of recovery in the agricultural sector. This is consistent with a growth model based on the advancement of both public and private services.
• Among the factors that will support growth are falling oil and gas prices; a more expansionary economic policy stance in Europe; and greater growth capacity in the service sector (due to immigration and increases in hourly productivity).
• Higher tariffs and uncertainty will affect trade flows and investment, along with the delay in the recovery of the agricultural sector.
• Bottlenecks are perceived as the lack of sensitivity shown by private investment to the recovery; the high level of household savings; and low population growth.
• By the end of 2026, GDP per capita could be 6.4 percentage points above 2019 levels (Spain 4.5 percentage points). If these forecasts are met, the unemployment rate could fall to an average of 13.9% in 2026 and 13,400 new jobs could be created in the 2025-2026 period.

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