Valencian economy faces the spillover from recent economic downturns in the Eurozone. In a new BBVA Research report issued today, forecasts for the autonomous communities were revised downward. The Valencian Community GDP projection aligns with the national estimate released last October, arriving at 1.9 percent. If the forecast holds, growth would slow to 1.5 percent, mirroring the overall national trajectory.
Consequently, the updated projection represents a four–tenths decrease. This downward revision is not isolated to Valencia. In fact, relative to the prior October outlook, only the Canary Islands show improvement, rising by two tenths, and the Balearic Islands by one.
At the opposite end, Navarra shows the weakest momentum with a seven–tenths drop to 1.5 percent, while Castilla y León, Cantabria, and Catalonia each fall by four tenths. GDP growth is now forecast at 1.7 percent for Navarra, 1.6 percent for Castilla y León, and 1.4 percent for Catalonia.
Factors
BBVA Research identifies the primary driver of this revision as the recent deterioration in activity across the euro area. Additional pressures come from high energy costs and ongoing uncertainty in economic policy that could intensify in the coming months. Ongoing tensions in the Middle East and shipping disruptions, particularly through the Suez Canal, contribute to the external risk environment. Yet some tourism-heavy regions could benefit from the conflict dynamics, potentially supporting stronger performance in tourist destinations such as Valencia and the Balearic Islands.
A Valencia port photograph graces this report, illustrating the region’s role in maritime trade and logistics.
Looking ahead to 2025, the outlook remains cautiously optimistic. BBVA Research expects a broader pickup in activity driven by stronger domestic consumption and revived European demand. Tourism-heavy regions like the Valencian Community and Catalonia, along with industrial and exporting economies that have lagged so far such as Navarra and the Basque Country, are projected to lead the improvement. The forecast envisions GDP rising around 2.7 percent in these areas, with the first two regions showing a more pronounced acceleration, surpassing a 1.3 percentage point edge over the baseline.
2023 closing
For Valencia, the near-term outlook remained favorable through the year that just ended. BBVA Research places Valencia among the top performers in the initial assessments, with a notable uptick that could push GDP growth to about 2.2 percent in 2023. Only Murcia edges Valencia slightly higher, recording a three‑tenths increase to 2.2 percent. This improvement is attributed to stronger engagement metrics and a rising employment base, underscoring the link between labor market momentum and regional GDP gains.