Spain | Extremadura Economic Outlook. September 2026

Extremadura is expected to maintain solid growth of close to 2% in 2026-2027, supported by consumption, investment and job creation, with relatively favourable GDP per capita performance. A worsening external backdrop, weak exports and agricultural activity, and structural bottlenecks will weigh on the outlook.

Key points

• Key points:
• GDP is expected to grow by 2.1% in 2026 and 1.9% in 2027, while GDP per capita would outperform the national average and could be 9.5 p.p. higher than in 2019.
• Employment growth is picking up, particularly in public services and urban areas, and could reach 2.6% in 2026 and 1.6% in 2027. Around 18,000 jobs could be created between 2025 and 2027, bringing the unemployment rate down to 13.8%. Immigration will be key to offsetting the decline in the Spain-born population.
• Consumption remains solid, supported by employment, household income and wealth, while investment in machinery, equipment and housing remains strong despite uncertainty. In addition, a more expansionary fiscal policy than previously expected is providing further support in the short term.
• Goods exports are down 2.4%, weighed down by food and semi-manufactured goods, while industrial production has fallen by 6.2% and the agricultural sector remains weak. Higher energy and fertiliser costs and supply-chain pressures are adding further headwinds, although tourism and services provide some offset.
• Weak productivity growth, labour shortages despite immigration, the housing shortage and constraints on the electricity grid could limit growth potential. Further ahead, a shrinking working-age population and the gradual withdrawal of fiscal support and NGEU funds will also weigh on growth.

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