Spain | Catalonia Economic Outlook. First Half of 2024

Summary

Catalonia's GDP could increase by 2.6% in 2024 and 2.1% in 2025, which would allow 192,000 new jobs to be created in the region in the two-year period.

Key points

• Key points:
• In 2023, GDP could have increased by 2.9% (0.4 pp more than Spain), after increasing by 6.0% in 2022. Services partially compensated for the weakness of industry and goods exports. Catalan GDP growth exceeded that of Spain for the third consecutive year.
• Affiliation with Social Security has shown greater dynamism in recent months, higher in Barcelona and Girona. Card spending is advancing more in transportation services, other services and bars and restaurants, due to the push of visitors from abroad.
• The Catalan GDP could increase by 2.6% in 2024, again above the Spanish average, and 2.1% in 2025, supported by the improvement of the European economy, although limited by tourism that is approaching the limit of capacity in high season. The price of raw materials, the process of reducing interest rates, the funds associated with the PRTR will help sustain public investment and services show gains in competitiveness. But housing is a more intense bottleneck than in other Autonomous Communities.
• If this scenario comes true, Catalonia will be the community that creates the most jobs in the two-year period. In addition, the unemployment rate will be reduced to 8.3% on average in 2025 and 192,000 new jobs can be created by the end of next year. In 2025, Catalonia's GDP will exceed that of 2019 by 7pp (5pp in the case of the eurozone).
• There are some risks: the stagnation of manufacturing exports may be reflecting structural problems in European industry; Attracting talent and training the unemployed is key to compensating for the labor shortage; economic policy uncertainty that affects investment and housing; Demand growth will be limited by fiscal adjustment.

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