Castile and León

• Castile and León’s GDP accounts for 4.8% of Spain’s GDP, so it is ranked seventh out of all regions.
• In terms of its population, with almost 2.4 million inhabitants, 5.0% of the total, it is the third most highly populated region. It is among the oldest regions, as 26.9% of its population is over 65 years old (national average of 20.4%).
• GDP per capita stands at 26,992 euros (2022), 4.2% below the Spanish average. The region has been catching up in recent years, within a context of sharp population decline and modest economic growth.
• In terms of its productive sectors, Castile and León is notable for the relative importance of its public sector (20.9% vs. national average of 17.8%), agriculture (5.2% vs. 2.6%) and its manufacturing industry (16.4% vs. 12.5%), where the agri-food, motor vehicle and chemical/pharmaceutical industries are particularly prominent. However, trade, transportation, hotels and restaurants, and leisure (24.4% vs. 28.4%) and industry-related services (22.1% vs. 28.5%).
• Although in recent years, the region has become more export-oriented, exports of goods account for a smaller proportion of GDP (23.1%) than on average across Spain (28.9%). In 2023, it exported goods worth 17.172 billion euros, representing 4.5% of Spanish exports. The leading export sectors are the motor vehicle industry (34.1% of the total), food (18.7%) and chemical products (10.7%). The region accounts for 45% of the tyres and inner tubes exported by Spain.

According to our estimates, Castile and León’s GDP will grow by 2.4% in 2024, slightly less than the Spanish economy as a whole (2.8%). Although employment is performing more sluggishly than average, there is a more positive trend in industry and exports, bolstered by a stronger performing motor vehicle industry, while favourable weather conditions are aiding the recovery of the agricultural sector.

CaixaBank Research’s forecasts point to Castile and León continuing along an expansionary path in 2025, albeit at a slower pace, with GDP growth of 2.1% (2.3% for Spain). Export growth will be dampened by a sluggish euro area, mainly due to Germany performing poorly. On a positive note, the improving inflation picture and easing of monetary policy should support the recovery in household spending; additionally, a further roll-out of the NGEU funds should boost investment.

Castile and León’s labour market is slightly less buoyant than it is across the country as a whole. In 2023, the average number of registered workers affiliated to Social Security grew by 1.8% in the year (2.7% in Spain), picking up to 2.0% year-on-year In September (vs. 2.3%), mostly due to administrative activities, healthcare and education, whereas employment fell in agriculture. In turn, the unemployment rate in Q2 2024 stood at 9.8%, 1.5 points below the national average.

Consumption remains sluggish in the region, due to the volume of sales of retail and consumer goods. After declining sharply in 2022 due to the inflationary environment, the upswing in 2023 was very weak (0.4% vs. 2.9% in the country as a whole), while in the first eight months of 2024 it continued to decline (0.4% year-on-year vs. 1.6%). As a result, it is one of the regions where consumption is furthest below the pre-pandemic levels of 2019 (–4.1% vs. +3.7% in Spain).

In 2022, after recording the worst figures out of all the regions, after being hit hard by the impact of bottlenecks in global markets and high energy costs, Castile and León’s industrial production experienced a strong upswing in 2023 (+3.1% vs. –1.4% in Spain), supported by the motor vehicle, chemical and electric power industries. This positive trend is continuing in 2024, with 5.4% growth year-on-year up to August (vs. 0.4%), figures without seasonal and calendar adjustments.

Castile and León’s exports of goods are recording the best figures across all regions. In 2023, thanks to the buoyancy of the motor vehicle industry, semi-manufactured goods (especially tyres and inner tubes) and food (processed foods), the region’s sales abroad grew by 15.9%, whereas they fell by 1.4% on average across the country. This year, with figures up to August, the contrast remains stark, as they grew by 16.6% year-on-year, while in the country as a whole they fell by 0.5%.