Spain’s Regional Growth Forecasts for 2023 and 2024
The Valencian Community is projected to grow its economy by 2.1 percent in 2023, a pace three-tenths below the national average and then modestly higher at 1.9 percent in 2024, according to BBVA Research. The firm identifies the Balearic Islands, the Canary Islands, and Madrid as the top three regions for growth in 2023, with annual GDP increases exceeding 3 percent in those areas. Catalonia is expected to follow with about a 2.7 percent rise. Tourism and consumption are not the sole engines here; other sectors are driving momentum as well.
BBVA Research released its growth forecasts for the autonomous communities for 2023 and 2024. Overall, Spain’s GDP is seen expanding by 2.4 percent in 2023. Regions forecast to grow more slowly include Extremadura at 2.3 percent, Castilla-La Mancha at 2.0 percent, Andalusia at 2.1 percent, and Murcia at 1.8 percent. The drought is anticipated to limit job creation in those areas, according to the study.
Exports of goods, a recovering industrial base, and notably a revived automotive sector support faster momentum in Aragon and Castilla y León, with growth expected to align with the national figure of 2.4 percent. In contrast, La Rioja, Cantabria, the Basque Country, Navarra, the Valencian Community, Asturias, and Galicia are projected to grow below the national average, around 2.1 percent, indicating uneven sectoral progress across regions.
2024 Predictions
Looking ahead to 2024, Spain’s GDP is forecast to ease to about 1.8 percent as international demand softens amid higher fuel costs and slower expansion in some sectors such as tourism and housing. The drought remains a relevant constraint, yet regions with strong agricultural exposure could rebound toward or near the national average as conditions improve.
Regional patterns show Andalusia, Extremadura, Murcia, and Castilla-La Mancha expected to narrow the gap with the national pace, each around 1.7–1.8 percent. Industrial activity should gain traction thanks to recovering European demand and fewer bottlenecks. Northern regions—Navarra, Aragon, and the Basque Country—are projected to perform around 2.1–2.2 percent, with Galicia, Castile and León, and Cantabria near 2.1 percent and Asturias around 1.9 percent. La Rioja could hover near 1.8 percent as the year progresses.
The Spain-wide outlook does not materially alter consumption by non-residents, allowing forecasts to hold for the Canary Islands and the Balearic Islands despite housing production constraints. Tourism growth is expected to slow in 2024, with modest gains of roughly 1.4–1.5 percent. Catalonia, the Valencian Community, and Madrid are anticipated to see around 1.9 percent growth, offset by a recovery in the industrial sector. A positive growth gap relative to the national pace is anticipated for 2024.