Extremadura

• With just over 1 million inhabitants (2.2% of the country’s total population), Extremadura is the fifth-least populated region.
• Extremadura’s GDP is 24.870 billion euros, 1.7% of Spanish GDP, so the region makes the third-smallest contribution to the national total.
• GDP per capita is 23,604 euros, the second lowest of all the regions and 23.8% below the national average. The progress made in recent years is mostly due to population decline.
• In terms of sectoral composition, Extremadura stands out for its strong agricultural sector, which accounts for 7.7% of its GDP (2.7% of the national average); also of note is the extractive industry (11.4% vs. 4.2% in Spain), as are public services (25.0% vs. 17.4%). However, of markedly less importance is the manufacturing industry (7.1% vs. 11.9%) and industry-related services (19.8% vs. 29.7%).
• Although goods exports as a proportion of regional GDP have increased significantly in recent years, they only represent 12.2%, well below the Spanish average (25.6%) and the lowest of the mainland regions. In 2024, it exported goods worth 3.330 billion euros, just 0.9% of all Spanish exports; over half of its exported goods come from the agrifood industry, especially fruit and pulses (26.9%), followed at some distance by chemical products and iron and steel (9.5% and 9.2%, respectively).

Extremadura is one of the least dynamic regions in the country. In 2024, we forecast GDP growth of 2.5% (3.2% in Spain), making it the last region to return to pre-pandemic levels. Weak household spending is driven by sluggish employment, compounded by the impact of a declining and ageing population. However, the agricultural sector continued to recover from the effects of the drought in previous years, which in turn boosted exports.

At CaixaBank Research, we forecast GDP growth of 1.9% for 2025, lower than in the country as a whole (2.5%). We expect agricultural production to continue to perform well, and employment and consumption to improve, as the easing of prices and loosening of monetary policy take hold. Activity may benefit from an upturn in investment, thanks to lower financing costs and further disbursement of NGEU funds.

Extremadura is one of the least dynamic regions in terms of employment. In 2024, the number of registered workers affiliated to Social Security grew at a far slower rate than the national average (0.9% vs. 2.4%), with similar figures as of February this year (0.8% year-on-year vs. 2.4%): although employment has risen in administrative activities, hotels and restaurants and education, there have been job losses in general government. Meanwhile, the region has the second-highest unemployment rate in the country: 15.3% in Q4 2024, almost 5 points above the Spanish average (10.6%).

In recent years, the consumption indicators have shown weaker performance in Extremadura than across Spain. The volume of sales of retail and consumer goods has failed to bounce back after the pandemic and, despite recording growth in 2024 (1.3% vs. 2.1% in Spain) for the first time in three years, it is one of the regions furthest adrift of 2019 levels (–3.8% vs. +4.1%). Meanwhile, despite growing by 2.3% in 2024 and 8.5% year-on-year in January-February 2025 (7.1% and 8.4% in Spain), passenger car registrations are also far below pre-pandemic levels (–35.5% vs. –18.9%).

In 2024, industrial production, of little importance in the region, failed to match the excellent figures from the previous year and virtually stagnated (–0.2% vs. 0.7% in Spain as a whole), as the sharp decline in consumer and capital goods could not be offset by the strong performance of the energy industry, supported by a buoyant hydroelectric power sector. The IPI continued to decline in January 2025: –3.2% year-on-year (vs. –1.0%)

Extremadura’s exports of goods are performing extremely well. In 2024, they grew by 10.2% (only by 0.2% in Spain), thanks to rising sales in the agri-food sector, especially oils and fats; capital goods (precision equipment), and semi-finished goods (iron and steel).