Spain | From tourism to passenger cars: the new geography of regional growth

Consumption picks up again in the first quarter of 2023, which continues to boost the most touristic regions. Furthermore, the more industrially oriented territories are benefiting from the gradual disappearance of bottlenecks and lower energy costs.

Key points

• Key points:
• In 2022, higher household spending due to the relaxation of pandemic-related restrictions resulted in an increase in leisure activities or social events.
• Greater dynamism has been observed in the communities that are more oriented toward tourism, especially foreign tourism: this is the case of the Balearic and Canary Islands, where GDP increased by more than 10%, Madrid (6.3%) and Catalonia (5.7%) are the regions that grew above the Spanish average (5.5%).
• Going forward, the NGEU funds will reach cruising speed and the revival of European demand will boost the goods exporting regions, which could move into the group heading growth.
• In the 23-24 biennium, although the island regions are expected to be the most dynamic, the higher European demand for goods and the recovery of the industrial sector explain why Madrid, Catalonia, Navarre, Aragon, Castile and Leon and La Rioja form a group whose growth will be, on average, between the 2.1% forecast for Spain and 2.3%.
• The rest will be below the average (but, in any case, with a GDP that will increase by more than 1.7% on average per year), which is mainly due to the delay in the recovery of the industrial sector (Cantabria, Asturias, Galicia, Castile and Leon and Castilla-La Mancha), the moderation of the increase in national tourism (Valencian Community and Andalusia), the difficulties in the agricultural sector and the delay in the NGEU funds (Murcia and Extremadura).

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