Galicia

• Galicia’s GDP is 63.230 billion euros, 5.2% of the national total, so it is sixth in the overall ranking.
• In demographic terms, the region has almost 2.7 million inhabitants, 5.7% of Spain’s total population. It is among the regions with the oldest populations in the country: 26.3% of the population is over the age of 65 (20.1% on average nationwide).
• GDP per capita stands at 23,499 euros, almost 8% below the national average, although it has been making up ground in recent years, not so much due to a notable growth in its GDP, but 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 (4.3% vs. national average of 2.9%), extractive industry (5.3% vs. 4.2%) and construction (6.4% vs. 5.6%). In contrast, industry-related services account for a far smaller percentage (23.8% vs. 29.2%).
• Galicia is notably export-oriented: goods exports represent 40.0% of regional GDP, 14 points above the national average and the country’s second highest percentage. In 2022, it exported goods worth 29.886 billion euros, 7.7% of Spanish exports, with the main export sectors being textile products (23.3% of the total), the motor vehicle industry (19.1%) and food (13%). The region exports 34% of the country’s textile products and half of its fish products.

According to CaixaBank Research estimates, Galicia’s GDP grew by 4.7% in 2022, slightly less than the Spanish economy as a whole (5.5%). The lesser importance of tourism in its productive sectors prevented greater momentum and this was compounded by the impact of bottlenecks in global supply chains on its powerful motor vehicle industry. Nevertheless, it was one of the few regions that managed to recover its pre-pandemic GDP level.

For 2023, our forecasts indicate GDP growth of 1.6% in Galicia, below the national average (2.0%). Household spending will be hit by rising prices and interest rates and the slowdown in employment growth. As uncertainty eases and the disbursement of European funds is stepped up, we expect activity to accelerate. Although the impact of tourism will not be as significant as in other regions, given its focus on domestic tourism, there is still scope for foreign tourism.

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 2.2% in 2022, compared to 3.9% in Spain, while the start of this year has seen a continued slowdown: after growing by 1.8% year-on-year in May (vs. +2.9% on average), the number of registered workers affiliated to Social Security is 4.0% higher than in March 2019 (vs. +7.1%); in the last year, job creation in education, professional activities and hotels and restaurants has been outstanding, cushioning the blow of the job losses in the agricultural sector. In turn, the unemployment rate in Q1 2023 was 10.9%, below the national average (13.3%) and the Q4 2019 figures (11.7%).

Household spending is being adversely affected by the loss of purchasing power caused by rising inflation. In 2022, there was a steeper decline in the retail trade index (in volume) than overall in Spain (–3.5% vs. –1.0%), and it is recovering at a slower rate in 2023: up until April, growth stood at 2.4% year-on-year, 4.4 points below the average, and 0.7% above the same period in 2019 (+2.2% in Spain).

The weakness in Galicia’s industrial production in 2022 (–1.4% vs. +2.4% nationwide) was partly caused by supply issues in global markets. In the first four months of this year there was an upswing, with growth of 7.2% year-on-year, in contrast to the meagre growth of the country as a whole (+0.7%), so it was 3.3% higher than in 2019 (–1.1% for Spain).

The performance of exports of goods is slightly weaker than average. In 2022, they grew by 18.3% (vs. +22.9%): the decline in automobile sales was offset by the buoyancy of consumer goods (mainly textile products) and energy products (thanks to the refinery in A Coruña and the regasification plant in Mugardos). In January-March 2023, growth slowed down (+8.2% year-on-year vs. +14.6%), due to the prolonged weakness in the motor vehicle industry, so the figures are 37.8% higher than in 2019 (+40.9% in Spain).