Published on Wednesday, November 15, 2023

Spain | La Rioja Economic Outlook 2023

BBVA Research forecasts GDP growth in La Rioja of 2.3% in 2023. Although the scenario going forward deteriorates, the recovery will continue, and GDP growth of 1.8% is expected in 2024. 5,700 jobs could be created in the 2023-2024 biennium.

Key points

  • Key points:
  • The forecast for GDP growth in La Rioja in 2023 remains at 2.3% due to the good performance of consumption, exports of goods and employment in the first half of the year, and despite a slowdown in industrial production and the construction sector. Quarterly GDP growth in La Rioja in 3Q23 would have been around 0.3%, below the quarterly average growth of the first half of the year (0.5%). Only the public sector contributed significantly to job creation in the third quarter.
  • The forecast for GDP growth in La Rioja in 2024 is corrected downwards (-0.7pp) to 1.8%, due to the deterioration of the global outlook and uncertainty. There is a worsening of the European economic situation and energy prices remain high, with uncertainty about their future evolution and their impact on inflation.
  • Demand problems persist in the residential sector, limiting the growth potential of construction, but other sectors, such as tourism and industry, appear to be less constrained than in other regions.
  • In any case, La Rioja seems better placed to face some of the challenges ahead, since it needs less energy than other regions to create added value, the consumption basket of households has a lower exposure to the goods and services that have risen the most and, above all, the regional debt is in a better position to face the coming years.
  • It is assumed that the recovery can continue thanks to the strength of the balance sheet of Riojan households and families, the support that can be provided by the acceleration in the implementation of European funds and their boost in the tendering of public works, and the fact that the regional government has already announced that it will maintain an expansionary fiscal policy also in 2024.

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