Spain Regional Watch. Third quarter 2019

Summary

At the start of 2019, growth returns to Madrid and the Mediterranean area, due to the dynamism of private consumption, domestic tourism and, to a lesser extent, exports of goods

Key points

• Key points:
• Private consumption and national tourism remain dynamic in the east and south of Spain, as well as in Galicia. On the other hand, household spending weakens in most of the north-central regions
• International tourism is particularly vigorous in Madrid, but is slowing in the Balearic and Canary Islands
• Uncertainty over the increase in tariffs and regulation in certain sectors (automobile) is slowing the recovery of exports in Galicia, Castilla y Leon and Cantabria. The increase in domestic demand in Europe has partially offset this in much of the Mediterranean area
• Forward, the lower vigor of domestic demand and tourism could hamper progress in the Mediterranean and the islands, although a slower recovery of exports would reduce the expected advantage for the northern regions
• Expansive monetary policy will facilitate investment to continue driving growth in highly diversified exporting regions or the ones with differential demand in the residential construction sector

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