Unicaja Banco publishes a new issue of the report ‘Previsiones Económicas de Andalucía’ (no. 111/2023)

The Andalusian economy could grow by 2.0% in 2023

22 NOV 2023

5 Min reading

Unicaja Banco has published the issue number 111 of the report ‘Previsiones Económicas de Andalucía’ (Economic Forecasts for Andalusia), prepared, as in previous editions, by Analistas Económicos de Andalucía.


This report prepared by the research company of Grupo Unicaja Banco is divided into four sections: 1) Economic environment; 2) Recent evolution of the Andalusian economy; and 3) Economic outlook for Andalusia 2023 and 2024 and 4) Provincial analysis.


The first section describes the international and national context and its recent evolution. The second section analyses the situation of the Andalusian economy, with special focus on the evolution of the main indicators, according to the region’s productive structure. The third section includes forecasts on the evolution of the GDP and employment in Andalusia for 2023 y 2024. Finally, the last section focuses on the analysis of the evolution and economic outlook of the Andalusian provinces.




Global and national economic environment


According to the latest report published by the OECD, the world economy is expected to grow by 3.0% in 2023 and by 2.7% in 2024, in a context of continuing high interest rates, given the persistence of higher-than-expected inflation levels. These forecasts are accompanied by significant downside risks, mainly stemming from a greater-than-expected slowdown in China, the materialization of disruptions in the energy and food markets, and the maintenance of high levels of public debt.


Regarding the Spanish economy, the Quarterly National Accounts (QNA) data, from the INE, for the second quarter of 2023 (after the revision of the Annual Accounts), show that the GDP grew by 0.5%, 0.1 percentage points (pp) below the previous quarter, registering a variation of 2.2% in year-on-year terms. The increase in production in this quarter was due to the contribution of domestic demand, especially that of household consumption and investment in construction.


The latest projections published by the Bank of Spain point to a GDP growth of 2.3% for 2023. Thus, the Spanish economy will be the fastest growing among the main economies of the European Union. In 2024, growth will stand at 1.8%, supported by private consumption and gross fixed capital formation.



Recent evolution of the Andalusian economy


According to the data from the Quarterly Regional Accounts of Andalusia, published by Instituto de Estadística y Cartografía de Andalucía (IECA), in the second quarter of 2023, the GDP posted a growth of 0.3%, 0.4 pp lower than that of the previous quarter, due mainly to the fall in household spending. In year-on-year terms, growth stood at 2.2%.


On the demand side, quarterly growth in production has been sustained by the contribution of domestic demand, with growth in gross capital formation (2.2%) and public consumption (0.8%) standing out. On the other hand, the external balance has contributed negatively to growth, due to a sharper decline in exports than in imports (-9.0% and -7.8%, respectively, with respect to the first quarter).


On the supply side, GDP growth in the second quarter was due to construction and mainly to industry, with a decrease in value added in the agricultural and services sectors. In year-on-year terms, the growth of the services sector (3.0%) stands out, with an increase of close to 15% in professional activities.


With regard to the labor market, employment growth continues to be significant, although there has been a certain slowdown. The number of workers under the Social Security scheme has grown by over 2% so far this year, although below the national average, due to the greater decline in employment in the agricultural sector, which has been severely affected by the drought.


According to the Labour Force Survey, in the second quarter, the number of employed persons stood at 3,380,100, which represents an increase of almost 53,000 persons with respect to the previous quarter, concentrated in the services and construction sectors. In year-on-year terms, employment grew by 3.1% (101,600 more employed persons), with a remarkable increase in the services sector, especially in professional activities and non-market services. The labor force grew by 2.3% and the number of unemployed decreased by 1.1%, bringing the unemployment rate to 18.1% (11.6% in Spain), 0.6 pp lower than a year earlier.



Economic Outlook for Andalusia 2023 and 2024


The forecasts of Analistas Económicos de Andalucía indicate that in 2023 as a whole, the Andalusian GDP could grow by 2.0%, based, to a large extent, in the growth in the services sector. As for 2024, the growth rate would moderate to 1.7%, in a context of high inflation, high interest rates, weakening international activity and growing geopolitical tensions.


Likewise, it is estimated that, on average in 2023, the number of employed persons (according to the Labour Force Survey figures) will grow by 2.4%, with job creation being sustained mainly in the services sector, which has registered higher than expected growth in the first half of the year. The number of unemployed could fall by 2.5%, which would bring the unemployment rate to 18.3% on average for the year, 0.7 pp lower than in 2022. In 2024, employment is expected to grow by 1.5%, with an estimated unemployment rate of 17.5%.


Provincial analysis


In a breakdown of the analysis by provinces, in the second quarter, growth would have moderated with regard to the first three months of the year. Sccording to the estimates of Analistas Económicos de Andalucía, the provinces of Malaga (3.8% in year-on-year terms), Seville (2.7%) and Cadiz (2.4%) would have recorded a growth rate over the regional average (2.2%).


In 2023 as a whole, growth over the regional average are estimated in Malaga (3.0%) and Seville (2.4%), while Granada (2.0%) and Cadiz (2.0%) would register similar rates to those of the Andalusian average.


Download here charts related to the report and here the full report.

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