Spain | Andalusia Economic Outlook. Second Half 2022

Andalusia's GDP increased by 5,9% in 2021. But the war in Ukraine and sanctions reduce growth expectations. Thus, growth is expected to be 4,3% in 2022, but to decelerate in 2023 to 0,9%.

Key points

• Key points:
• Andalusia's GDP grew by 5,9% in 2021. Improvements in domestic tourism, consumption, industry and the good tone of affiliation boosted the recovery.
• Regional GDP is expected to grow by 4,3% in 2022. The most recent data already show a slowdown in the economy, which will continue in the coming quarters.
• In 2023, Andalusian GDP is expected to increase by 0,9%, due to the fall in European demand, higher energy and transport prices, and higher financing costs. Lower indebtedness than in the previous crisis, NGEU funds and less exposure to sectors affected by the bottlenecks that condition industrial activity will support growth.
• By the end of 2023, Andalusia's GDP per capita could already be back to pre-crisis levels. The regional economy has already recovered pre-crisis employment levels, and 135.000 jobs could be created over the 2022-2023 biennium, although the unemployment rate will still remain at 19%.
• The main risks for the regional economy are the containment of inflation, the obstacles to investment that may hamper competitiveness or slow down the impact of the NGEU funds, the lack of adequate labour to meet business needs or the still high weight of temporary contracts in new hires. The implementation of NGEU-related funds needs to be accelerated, and in the medium term the bias will depend on the reforms to be adopted in the coming months.

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