The Galician GDP will remain above the Spanish average in 2024

The Galician GDP will remain above the Spanish average in 2024


The year in which Galicia will hold elections for its Parliament It will also mark a milestone from an economic point of view. The forecasts of the current acting regional government attribute GDP growth in 2024 of 1.9%, and could even exceed 2% according to private analysis organizations such as BBVA Research. In both cases, It is assured that the Galician economy will exceed its own record of 2023 (1.8% awaiting confirmation) and, more importantly, the average for our country as a whole in the current year.

Not in vain the consensus of experts from Funcas, the Bank of Spain and the main international organizations place the advance of Spanish GDP in 2024 at approximately 1.6% compared to 2023.

As a result, Galicia, which is seeking a president this February, is consolidating itself as the sixth autonomous community in relation to the volume of its GDP. It ranks eleventh in per capita income, 15,650 euros per inhabitant in 2022, according to the latest regional accounting from the National Institute of Statistics (INE).

The region has been able to gain muscle in the years after the stoppage caused by Covid-19, as the experts at CaixaBank Research show. More concretely, after growing 4.7% in 2022according to the calculations of the banking entity’s research service, “distinguished itself as one of the autonomies that managed to recover the pre-pandemic GDP” in that year.

According to the most recently revised official data, the Galician autonomous community reaches the midpoint of its electoral campaign with the confirmation of an expansion of 1% in the third quarter of 2023 compared to the same period of the previous year. Regarding the quarterly evolution, from July to September, it was 0.3%.

More in detail, from the point of view of demand, in the last quarter, internal demand contributed 0.9 points to GDP growth, while external demand was 0.2. Private consumption increased by 0.2% and public consumption by 5%.

From the perspective of supply, the services sector (2.1%) and the primary sector (0.9%) registered positive rates, with a slight drop in the construction sector (0.1%). For their part, industrial branches registered a negative rate of 2.5%.

The unemployment statistics in the community also approves by not exceeding 10%, thus positioning it as the fifth lowest among all the 17 Spanish regions. To be more specific, At the end of 2023, 114,700 unemployed people were counted in Galicia, of which 61,700 were women and 53,000 men. This rate places young people under 25 years of age at 21%, occupying the third lowest position in the country.

But aside from the more purely macroeconomic numbers, Galicia faces its greatest demographic challenge as it is the community with the largest elderly, dispersed population with one eye on the sea, although it can be firmly stated that they do not live off fishing alone. Galician.

Territorial differences

Regardless of the color shown by the autonomous Parliament for the next four years, it is necessary to modify the trend of a territory marked by the gap between the rural and urban world taking into account that Galicia is now the sixth autonomous region by population (2.6 million inhabitants), with a notable weight (it contributes 5.2% of the national GDP) of the primary sector and industry.

There are therefore great social differences between the countryside and the cities, and between the interior and the coast. In fact, Galicia has not stopped losing population since 1986. Since then it has 200,000 fewer inhabitants. Its demographic weight has also fallen since the beginning of the 20th century when it represented more than 10% of the Spanish population, while currently it barely exceeds 5% according to a recent study by the University of Vigo. With an average age of 48 years, it exceeds the national average by four years. From this point of view, there is more relevant data such as the fact that in only two Galician municipalities there are more children than people over 65 years of age (Ames, in A Coruña, and Salceda de Caselas, in Pontevedra), while in some, such as Cervantes, in Lugo, there are 17 adults for every child.

The situation is delicate in Ourense and Lugo since in both provinces aging has been faster, practically doubling the figure for Spain. Here appears the main gap that the community crosses: the difference between the interior, more depressed economically and demographically, and the so-called Atlantic Axis, the line that runs from Ferrol in the north to Vigo in the south.

By municipality, it is observed how the seven Galician cities and their metropolitan areas are the richest areas, while the less populated areas have much lower incomes. Part of the problem is explained by the lack of medium-sized companies, which are the ones that make up a territory, according to experts.

No medium-sized SMEs

Many analysts thus agree that the Galician economy has a very small group of large companies and a large group of very small ones. We must not forget that the headquarters of giants such as Inditex – the company with the largest market capitalization in Spain – or Stellantis are located in this territory. Nor should we forget Alcoa, an aluminum factory on which a good part of the population of Mariña Lugo depends.

The middle of the business spectrum, however, still encounters significant difficulties in developing in the rural sector. As in the rest of Spain, The service sector is the main engine of the Galician economy (represents 22% of GDP, a figure almost identical to the national figure). Commerce, hospitality and tourism employ almost a third of workers.

Tourism is one of the sectors that is in very good health, already completely recovered from the ravages caused by the pandemic. The drive and positioning of the Xacobeo on the world map have influenced the process of deseasonalization of tourism.

But, despite record marks year after year, its peculiar meteorology with rain and cloudy skies for much of the year, leads to a shorter tourist season, essentially two months, while in the Mediterranean it can reach almost six. For this reason, the weight of the sector is less than in other communities.

With everything, the team of the president of the Xunta, Alfonso Ruedahighlights that the region benefited from the arrival of seven million visitors last year.

In contrast, the greater relevance of sectors such as industry, which represents 17.8% of GDP, two points above the national average, and the primary sector stands out. Agriculture, livestock and fishing employ almost 6% of workers in the community, two points above the figure for Spain. Of special relevance are exports in the Galician X-ray as they represented 43% of the GDP, which places Galicia as the second community with the greatest weight in sales abroad, only behind Navarra, and with a figure 14 points higher of the Spanish average.

Stellantis

Galicia exports above all textile (23.3% of the total), automotive (19.1%) and food (13%). It also sends half of all the fishing products that Spain exports abroad, according to CaixaBank Research. Regarding the sale of vehicles, the data is essentially due to the presence of the Stellantis -formerly Citroën- factory in Vigo.

But accustomed to seeing the glass half full, it is necessary to look at other areas whose takeoff does not go unnoticed.

The clear example is the drone and artificial intelligence sector supported with public and private financing, at the Rozas aerodrome (Lugo) and which in recent years has hosted dozens of companies. Without a doubt, a “a bet that inspires others on a larger scale to reactivate the economy of this community”.

The future of the region, without a doubt, depends on achieving full decarbonization, based on a circular green economy that respects the preservation of the natural environment.

The opportunities are numerous because Galicia is a potential community in terms of renewable energy, especially wind and marine. We must not forget that Galicia is the community with the most kilometers of coastline in Spain.

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