Spain | Regional Economic Outlook. Fourth Quarter 2024

In 2024, growth is revised upwards due to the boost in domestic consumption and tourism. The end of the drought, the improvement of the European economy, and the reduction of interest rates will help sustain growth, affected by the impact of the dana and possible changes in tariff policy in the US.

Key points

• Key points:
• Exposure to service exports (tourism and rest) explains the hierarchy in GDP growth forecasts in 2024, with the Canary Islands and the Balearic Islands among the most dynamic regions and Madrid and Catalonia growing in line with the average.
• In 2025, agricultural production and the expected strength of private and public consumption will lead growth in the communities of southern Spain.
• The possible tariff changes, together with the problems in the automobile sector and the still low growth in the eurozone, induce further downward revisions in the growth prospects for 2025 in the industrial and exporting autonomous communities.
• The slowdown is expected to continue in 2026, affecting the Mediterranean and the islands to a greater extent due to the exhaustion of tourism, the return to normal levels of growth in the agricultural sector and fiscal rules that will restrict the advance of public spending. Lower rates, European funds, the need to replace equipment and the acceleration of demand in Europe will help the northern CCAA to a greater extent. Furthermore, the modernization of productive capital and the arrival of aid will continue to drive growth in the Valencian Community.

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