Spain | Mediterranean tourism and service exports, a withering support?

In 2024, the Spanish economy presents a heterogeneous outlook, with different autonomous communities showing significant variations in their growth prospects. In this quarter's BBVA Research Regional Economic Outlook report we explore the most relevant economic trends and challenges for this year and next.

Key points

• Key points:
• The remarkable performance of employment and the increase in the labor force as a result of immigration and a higher participation rate is proving to be a key driver of the economy and household spending, especially in the tourist regions, which are leading growth thanks to stronger employment.
• Exports of both tourism and non-tourism services exceeded initial expectations, benefiting, in addition to the island regions, Madrid, Catalonia and the Valencian Community.
• Some northern regions, such as Navarre, Castile and Leon, Aragon, La Rioja and Galicia, are beginning to see a revival of the industrial sector, which is boosting the export of goods.
• The short-term challenges in the south are of a different magnitude. The severity of the drought is subsiding, and there are practically no areas under a water alert, which has prevented a greater impact on sectors other than agriculture.
• For 2025, expectations are for a slight slowdown in the growth of the Spanish economy to 2.1%. The Region of Murcia, Castile-La Mancha, Andalusia and Extremadura may be part of the group of fastest growing regions in the coming year, against a backdrop of a probable increase in the availability of water in the agricultural sector, which should allow output to normalize.

Authors

Geographies

Topics

Tags