Published on Wednesday, June 28, 2023 | Updated on Thursday, June 29, 2023

Spain | Regional Economic Outlook. June 2023

Upward revision of the Spanish economy in 2023 to 2.4%, to be led by the Balearic Islands, Canary Islands and Madrid. But growth in 2024 is revised by 0.5 pp (to 2.1%), due to the slowdown in the tourism industry, the rise in interest rates, and the delay in the impact of the NGEU funds.

Key points

  • Key points:
  • In 2020, services exports will help to achieve above-average GDP growth in the Balearic Islands (3.6%), Canary Islands, Madrid (3.0%) and Catalonia (2.6%). Castilla y León (2.2%), Asturias (2.1%) and Galicia experienced above-average revisions due to the recovery of the industrial sector and sales of goods to the rest of the world.
  • The decline in investment and household consumption expenditure since mid-2022 has limited growth in regions with a greater dependence on domestic demand. As a result, the Valencian Community (2.1%) and the Region of Murcia (1.8%) will experience lower growth than the national average.
  • Difficulties remain in automobile production, while energy costs and regulatory uncertainty may still be problems in some sectors. This prevents higher upward revisions than in Spain as a whole in Navarra and the Basque Country (2.6%), La Rioja (2.3%) and Aragon and Cantabria (2.2%).
  • In 2024, the increase in activity will be conditioned by the restrictions on growth in some sectors. This explains the below-average GDP growth in regions such as the Canary Islands (1.4%), the Balearic Islands (1.5%) and Catalonia (2.0%). In Murcia and Andalusia, the slower performance of domestic tourism and agriculture will limit growth to 2.0%.
  • The normalisation in the automobile sector, together with persistently low energy prices and the change towards a more sustainable production model should favour manufacturing supply. The Basque Country (2.6%), Asturias, Cantabria, Castilla y León, Galicia, Navarra and La Rioja (2.5%) and Aragón (2.4%) will grow above the Spanish average.

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