A despite living in the early months of 2024 with a modest upturn in Valencia’s economy, business leaders expect this year to bring a slower growth pace for the autonomous community’s GDP, finishing below the 2023 figure and below the national average. This outlook comes from the latest Economic Situation and Prospects report issued by the Valencian Employers Confederation (CEV). It sketches a scenario in which economic expansion would run between 1.6% and 1.8% for the region. (CEV, 2024)
The forecast reflects a dual pattern in demand. Across the country, researchers anticipate a gradual improvement in investment and stable private consumption, yet Valencia faces a tepid external demand due to sluggish progress in key trading partners, including the euro area, and a recovery in imports that should support only modest gains in external demand. In addition, firms in the region continue to absorb higher costs for financing, raw materials and components, transportation, freight, and energy. Rising wages and social security contributions, along with difficulties in recruiting specialized professionals, further weigh on the margins of Valencian companies. (CEV, 2024)
Un 2 % de mejora en 2023
In 2023, the Valencian Community grew by 2 percent, led by domestic consumption especially among households and the strong performance of international tourism. Still, that growth was half a percentage point below the national average. The CEV notes that the primary sector faced a deeper, negative cycle marked by high operating costs, adverse weather, and tough competition from imports, factors that also sparked agrarian protests in recent months. (CEV, 2024)
In industry, a slight improvement in the final quarter of the year did not prevent concerns over the ceramic cluster and the automotive sector given their economic, social, and employment importance and their geographic concentration. In construction, the number of mortgages continued to fall, even as civil engineering bidding activity picked up. In services, tourism stood out, while retail faced challenges from the food sector. (CEV, 2024)
La prórroga de los Presupuestos
Beyond the outlook and the uncertainty created by geopolitical tensions and domestic political instability, the CEV warns that the extension of the 2023 General State Budget will negatively affect the Valencian Community. The region, consistently underfunded and with high territorial investment deficits, is especially affected, particularly in the province of Alicante. (CEV, 2024)