BBVA Research has joined upward revisions on the growth of the Spanish economy and has improved its forecasts for almost all communities. The GDP will advance by 2.9% as a whole in 2024, four tenths more than what the study center estimated in its previous forecast, and several territories will see increases above this percentage, especially thanks to the pull of tourism and exports. These communities are the Balearic Islands, the Canary Islands, Catalonia, Madrid, the Valencian Community, Murcia, Castilla y León and Aragón, according to data from the Regional Observatory relative to the third quarter of the year published this Tuesday.
“The communities with the greatest weight of the foreign tourism and exports non-tourist services lead growth this year,” the document states. All of the aforementioned territories will experience an evolution higher than the national average, 3.1% for the Balearic Islands and the Canary Islands, and 3% in the case of Madrid and the Valencian Community. Castilla y León (3.1%), Aragón (3.0%) will also register vigorous advances thanks to the good performance of sales of goods abroad, as will Murcia (3.4%), which will also benefit from the good progress of public consumption and that has been the territory with the greatest upward revision, of almost one point. Galicia’s growth will be 2.9%.
Among the most lagging autonomies, those that will experience an expansion lower than that predicted for the entire territory, are La Rioja (2.7%), Andalusia (2.7%), Castilla-La Mancha (2.6%), Navarra (2.5%), Asturias (2.4%), Cantabria, the Basque Country (2.3%) and Extremadura (2%). The two regional communities, furthermore, are the only ones for which the organization lowers its forecasts with respect to previous estimates.
The reason for the slower progress in the north predicted for this year – although robust, especially when compared to the European slowdown— is due to the weakness of the industrial sector, a concern that Spain shares with the rest of the community market and that has become a puzzle for EU authorities. Andalusia, Castilla-La Mancha and Extremadura, although they will grow below the average, will do so above previous estimates thanks to the good progress of employment in these territories and the lower expected impact of the drought. The most touristy regions will lead job creation this year, in addition to Aragon and Castilla y León.
The public sector will also contribute to progress, especially thanks to job creation. “The affiliation data in this sector show that in all communities except Castilla-La Mancha, job creation is accelerating compared to last year. Murcia and La Rioja stand out, as well as Madrid, Castilla y León and the Canary Islands. On the other hand, some communities in the south, the Basque Country and Cantabria show less significant increases,” says the document, which, on the other hand, warns of lower affiliation to Social Security in the third quarter of this year, explained by the lower dynamism of commerce and hospitality.
On the other hand, it points to a containment of inflation, in line with the latest data from the INE, predicting that the price trend “will be around 2%”, while insisting that housing construction is “insufficient”, especially in the communities with the greatest tension in demand, such as Madrid and the Basque Country.
Weaker advance in 2025
BBVA’s research service also revises its growth forecasts upwards for 2025, although it foresees a slowdown: GDP will increase by 2.4% on average, with a more intense rebound in the north of the Peninsula and areas with more presence of the primary sector. “Between 2024 and 2025, growth shifts from areas with more service-oriented activity to agricultural areas or areas with greater investment and exports of goods. Northern Spain will continue to grow above its historical average. The end of the drought will help recovery in southern communities, with more weight in the agricultural sector or with activities restricted due to lack of water. On the other hand, the regions most focused on tourism or industrial regions that had already experienced an improvement in 2023-2024 (Aragón and Castilla y León) are experiencing the greatest slowdowns,” the report details.
That is to say: tourism will continue to lead the way, especially in the Balearic Islands and the Canary Islands (2.3%), along with exports of goods, but to these elements there will be added a rebound in investment driven by the drop in interest rates. These last two factors will benefit territories such as Catalonia (2.6%), Madrid (2.4%) and the Valencian Community (2.3%).
The good performance of exports and investment will also be noted in the north: activity will advance by 2.8% in the Basque Country and Navarra, 2.5% in Galicia, 2.4% in Aragon and La Rioja. The forecasts for Asturias and Cantabria, on the other hand, are below the national average, at 2.1%, while the south could advance higher. “The progressive normalization of the climatological situation will allow the regions with the greatest weight in the agricultural sector to be among the most dynamic in 2025: Andalusia, Castilla-La Mancha, Extremadura and Murcia could grow by 2.7%,” the document adds.
