Galicia

• Galicia’s GDP is 69.830 billion euros, 5.2% of the national total and it is sixth in the overall ranking.
• In demographic terms, the region has 2.71 million inhabitants, 5.6% of Spain’s total population. It is among the regions with the oldest populations in the country: 26.6% of the population is over the age of 65 (20.4% on average nationwide).
• GDP per capita (2022) stands at 25,906 euros, around 8% below the national average, although it has been making up ground in recent years, not so much due to notable growth in its GDP, more due to a slight decline in its population.
• As for its productive sectors, Galicia stands out for the relative importance of its primary sector (4.0% vs. national average of 2.6%), extractive industry (5.8% vs. 4.9%) and construction (6.2% vs. 5.4%). In contrast, industry-related services account for a far smaller percentage (23.2% vs. 28.5%) of GDP.
• Galicia is notably export-oriented: goods exports represent 42.8% of GDP, almost 14 points above the national average and the country’s second highest percentage. In 2023 its goods exports amounted to 30.038 billion euros, 7.8% of Spanish exports: the leading export sectors are textiles (23.1% of the total), the motor vehicle industry (19.0%) and food (13.6%), especially fishing. The region exports 37% of the country’s textile products and over half of its fish products.

According to CaixaBank Research estimates, Galicia’s GDP grew by 1.9% in 2023, slightly less than the Spanish economy as a whole (2.5%). Against the backdrop of slowing employment growth, price and interest rate pressures hit household spending. On a positive note, the industrial sector benefited from supply chains returning to normal, especially its powerful motor vehicle industry.

For 2024, our forecasts indicate GDP growth of 2.1% in Galicia, below the national average (2.4%). Reflecting the improvement in the euro area’s economy, foreign demand will support increased momentum in exports. One key factor that may boost activity is the disbursement of EU funds: Galicia has proven to be one of the most effective regions in its pursuit of aid.

The Galician labour market is slightly more sluggish than across the country as a whole. The number of registered workers affiliated to Social Security grew by 1.7% in 2023, compared to 2.7% in Spain, while the start of this year has seen a similar trend: 1.7% growth year-on-year in May (vs. 2.4% on average) was supported by job creation in education, professional activities and healthcare, although there were job losses in the agricultural sector. In turn, in Q1 2024 the employment rate stood at 10.5%, almost 2 points below the national average (12.3%).

After the sharp decline in household spending in 2022, which was adversely affected by the loss of purchasing power due to rising inflation, the subsequent recovery has been more subdued than in the country as a whole. As such, the volume of sales in the retail trade index grew by 0.9% in 2023 (2.9% in Spain) and by 1.3% year-on-year in the first four months of this year (vs. 2.0%).

Once the global market supply problems that had hampered Galicia’s industrial production during the previous year were resolved, in 2023 it recovered, albeit modestly, and recorded scant growth of 0.8%, which was, in any event, better than the figures for Spain as a whole (–1.4%). In the first four months of this year, regional IPI recovered strongly and recorded an increase of 4.0% year-on-year, without any seasonal and calendar adjustments (1.9% for Spain).

Goods exports are holding up better than in the country as a whole. In 2023 they grew by 0.5% (–1.4% in Spain): the buoyancy of sales of capital goods, especially industrial machinery and transport equipment, outweighed the fall in sales of semi-manufactured goods and energy products, hit by the price correction of oil products (the good figures from the previous year due to the refinery in A Coruña and the regasification plant in Mugardos were not repeated). In January-March 2024, the 1.1% year-on-year fall in Galician exports is much lower than that recorded in Spain (–9.0%).