GDP dynamics and regional disparities in Valencia: 2021 review

No time to read?
Get a summary

After a difficult year, the memory of 2020 is fading. The pandemic’s impact on Valencia’s economy lingered, yet per capita income rose a good deal in the most recent year, even though it still trails the national average and the wealthier regions. The gap has widened slightly since before the Covid outbreak, a trend that remains evident in the latest figures.

This conclusion comes from the Regional Accounts published by Spain’s National Institute of Statistics. The data continue to show wide disparities between autonomous communities, underscoring persistent structural differences across the country.

Last year, GDP per capita in the Community of Valencia stood at €22,289, up by €1,509 from 2020, when activity was halted by containment measures. The improvement still leaves residents €834 short of the pre-Covid level, illustrating that recovery has been uneven and incomplete.

GDP per capita by autonomy. Information

In any case, the main takeaway is the substantial distance between Valencians and the national average in well-being, and especially from the most developed regions. The 2021 figure places the Community at 87.4% of Spain’s average income per capita, equivalent to €25,498. In practical terms, every Valencian earned about €3,209 less than the national average.

More broadly, a persistent productivity gap keeps the Valencian economy behind the national income level. Since 2019, the region’s GDP per capita has hovered around 87.5% of the national level. Valencia’s decline was smaller than in many other areas, with the ratio recovering to about 88% in 2020 and slipping back to 87.4% in 2021. It should be noted that this widening gap is partly attributable to population growth in the Community, affecting overall wealth distribution. According to INE, wealth redistribution also faced a light setback nationwide.

Compared with other autonomous communities, Valencia sits closer to the middle of the pack than the leaders, yet still ahead of several regions. Valencians were €3,383 richer than those in Andalusia, which posted GDP per capita of €18,906, but were €12,532 poorer than residents of Madrid, where income reached €34,821.

In the rankings, the Basque Country posted €32,430; Navarre €31,024; Catalonia €29,942; and Aragon €28,912 per person.

Data from regional accounts released this Monday still do not include provincial GDP estimates, making it hard to confirm whether Alicante’s per-capita income sits lower than other autonomies. For context, in 2019 the state average was €19,944, dropping to €17,999 in 2020 amid the pandemic’s impact.

Nominal GDP growth by autonomies in 2021. Information

Commerce and hospitality helped push the recovery forward. Overall, Valencia’s GDP grew slightly more than the national average last year, by 5.6% versus 5.4% across Spain. The Balearic Islands surged by 10.7%, the Canary Islands by 7%, and Navarra by 5.9%; Ceuta and Melilla rose about 4%, while Castilla y León grew roughly 4.3%.

BBVA projects Valencia’s GDP to rise by about 1% next year, though it warns that tourism could face constraints. The sectors that expanded the most were those hit hardest by restrictions in the prior year. Trade and hospitality rebounded from a 22.9% decline in 2020 to a 14.4% increase in the following year, though a full normalization did not occur until late 2021 or early 2022.

On the production side, manufacturing dipped by 13.8% in 2020 but then grew by 8.2% in the following year; the information, communications, and professional services sector rose by about 6.8%, easing the decline observed in the prior year. Public administration and agriculture also contributed gains, at around 1.9% and 2.4% respectively. The only sector with a negative change was construction, which contracted by 3.4%.

No time to read?
Get a summary
Previous Article

Scaloni, Deportivo, and the Galicia-Argentina bond that fans treasure

Next Article

Terry Hall death: The Specials frontman’s lasting impact on ska and social commentary