BBVA Research Revises Valencian Community Growth Outlook for 2023 and Beyond
BBVA Research has nudged upward its 2023 growth forecast for the Valencian Community by 0.3 percentage points, signaling a brighter path this year. The projection now points to a 4.3% rise in GDP for 2023, with a steady 1% gain anticipated for 2024. This uptick marks a modest improvement over earlier estimates, and the outlook for 2024 suggests a renewed upward trajectory, reaching about 3.4%. Within this broader framework, tourism is expected to decelerate, becoming the sector that anchors the economy while influencing overall growth; the region nonetheless benefits from a recovering European economy and energy cost certainty that help stabilize activity.
The latest BBVA Research release also notes that Spain’s GDP is on a trajectory to reach 4.6% in 2022, supported by stronger consumer behavior and ongoing export momentum. For 2023, the forecast has been nudged upward by 2%, with Spain’s GDP projected to grow by 1.2%. This improvement is largely driven by construction and export strength within several autonomous communities, reinforcing the national recovery through regional dynamism.
According to the report, after a robust tourism rebound last year, Spanish destinations are nearing pre-crisis occupancy levels. Yet, momentum in the second half of the year is expected to ease as disposable income in origin markets remains constrained, potentially tempering the pace of tourism-driven growth in the near term.
If these projections hold, the Valencian Community could face a softer path in the near term. Still, a European economic upturn beginning in mid-2023, along with more predictable energy costs, supports a pickup in industrial activity and a revival in goods exports. This combination could help maintain regional GDP growth around 1% even in the face of a weaker start to the year; the overall picture remains cautiously optimistic across multiple sectors.
Within the regional landscape, the Basque Country, Navarra, and Galicia lead upward revisions, each gaining about 0.5 percentage points, followed by advances in the rest of the north, Catalonia, and the Valencian Community. These gains are attributed to the steady recovery of European demand, smoother supply chains, and diminishing uncertainty, which together bolster production and investment across these areas.
Private consumption and foreign tourism contribute less to national GDP in 2023, a trend that helps explain the downward revisions for the islands, the Community of Madrid, the Region of Murcia, Castilla-La Mancha, and Andalusia. The report emphasizes that monetary and fiscal dynamics, alongside energy market developments, will continue to shape regional performance through the year.
BBVA Research Sees 5.2% GDP Rise for the Community in 2022
BBVA Research also anticipates a 3.4% growth pace by 2024. The anticipated rebound is supported by renewed access to generation funds, greater policy certainty, lower inflation, and rising household income, which together should sustain stronger activity in regions with substantial industrial bases. Conversely, tourism-heavy areas may see slower growth as visitor inflows normalize after the peak surge.
Beyond tourism, the forecast flags inflation as a key risk, with price pressures likely to stay elevated in the near term. While wages are climbing, real purchasing power will still take time to recover to pre-pandemic levels. The careful balance of income growth and price stability will be central to sustaining revenue growth and investment across the economy.