Navarre AC

• Navarre has over 678,000 inhabitants, 1.4% of the total population, and is the region with the third smallest population in Spain.
• The region’s GDP stands at 22.595 billion euros, equivalent to 1.7% of Spanish GDP, so it is the region that makes the fourth smallest contribution to the national total.
• At 33,798 euros, its GDP per capita is the third highest in the country and it is 20.0% higher than the national average (13.2% below the average in the euro area).
• Navarre’s productive sectors are mainly notable for the high relative importance of the manufacturing industry, which accounts for 25.8% of its GDP, the highest percentage of all regions (national average of 12.5%): the region, which contributes 3.5% of the country’s manufacturing GVA, is home to leading companies in the motor vehicle, wind power and pharmaceutical industries. However, services account for a far smaller than average percentage, in terms of trade, transportation, hotels and restaurants, and leisure (24.5% vs. 28.4%), and especially industry-related services (20.3% vs. 28.5%).
• Navarre is clearly export-oriented. Exports of goods, which account for 47.4% of regional GDP, the highest percentage among all regions (28.9% in Spain), totalled 10.175 billion euros in 2022, 2.7% of the national total: exports of motor vehicles account for almost 36.0% of the total, far ahead of food (16.3%), especially fruit and pulses, electrical appliances (10.1%) and industrial machinery (9.7%).

In 2024, Navarre’s economy is performing slightly more sluggishly than on average in Spain: we estimate GDP growth of 2.5% (2.8% in Spain). The modest consumption and employment figures stand in contrast to the signs of recovery in industrial activity, especially in the motor vehicle industry, a key sector for the region.

In 2025, our forecasts suggest that GDP growth in Navarre will plateau at 2.5%, a rate slightly higher than the national average (2.3%). Foreign demand will be constrained by the weakness of our euro area partners, but we expect household spending to improve thanks to easing inflation and falling interest rates. Meanwhile, with competitive market services – especially professional business services – a diversified industrial sector and a highly skilled population, the region is better equipped than others to capitalise on European funds.

The performance of Navarre’s labour market is somewhat more muted than on average in Spain, with a 1.8% rise in the number of registered workers affiliated to Social Security in 2023 (2.7% in Spain) and a 1.5% year-on-year rise in October 2024 (vs. 2.5%). Job creation in the manufacturing industry, healthcare and general government has been outstanding over the last year. Moreover, the unemployment rate stood at 7.7% of the working population in Q3 2024 (national average of 11.2%), among the lowest of all regions.

According to the retail and consumer goods index (in volume), household spending in Navarre is performing worse than in Spain as a whole. After a sharp decline in 2022 amid inflationary pressures, it stagnated last year, despite growing by 2.9% nationwide, and although this year (figures up to September) it is recovering faster than average (2.7% year-on-year vs. 1.6%), it is the region furthest adrift from pre-pandemic levels in 2019 (–4.9% vs. +3.8%).

Navarre’s industry, which had performed extremely well in 2021-2022 thanks to its strong competitiveness, especially in renewable energy products - was notably weak in 2023, with industrial production falling by 5.6% (–1.6% on average nationwide), hampered by the energy sectors and the motor vehicle industry. Although the recovery in 2024 has been modest, it is higher than the national average, with 1.5% year-on-year growth up to September (vs. 0.2%).

The weakness of Europe’s main economies in 2023 had a negative impact on Navarre’s exports of goods, which fell by 4.9% (–1.4% on average in Spain): the sharp decline in sales of motor vehicles and semi-finished goods (in particular paper, chemical products and metals) was partially offset by the strong performance of capital goods (in particular engines and electrical appliances) and food (fruit and pulses). The downturn continued over the first eight months of 2024, falling by 1.3% year-on-year (vs. –0.5% in Spain).