Spain | Andalusia Economic Outlook. First Half 2024

Summary

Andalusia's GDP will grow by 1.5% in 2024 and 2.5% in 2025. This will allow 175 thousand jobs to be created in the two-year period and reduce the unemployment rate to 15.7% in 2025.

Key points

• Key points:
• The production of consumer and energy goods remains weak, while housing sales fell by 12.8% compared to 2022. New housing construction visas showed high volatility. Exports of goods also show declines, weighed down by agricultural production. Likewise, the lack of labor appears to restrict growth in some sectors.
• In 2024, households and companies resent the increase in interest rates, the increase in input prices, and the shopping basket, geopolitical and economic policy uncertainty, supply restrictions, in addition to the slowdown of the eurozone.
• The agri-food sector is still suffering the effects of the drought, but the resilience of the production of capital and intermediate goods and non-residential construction could lead to greater growth this year.
• By 2025, fuel prices are expected to fall, improving the competitiveness of companies and reducing inflation, helping to recover the purchasing power of families. Furthermore, lower interest rates will support consumption.
• Risks: stagnation of the economy in the main EMU countries; the drought, which could extend its impacts from the agricultural sector to other sectors if the weather conditions do not reverse; the necessary process of consolidation of regional accounts and the lack of human capital.

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