Tourism accelerates the growth of the Valencian economy: GDP will increase by 2.1% in 2024

In the middle of BBVA's hostile takeover bid for Banc de Sabadell, the first entity's analysts presented this Tuesday the report that analyzes the situation of the Valencian economy in the first half of the year and also includes future forecasts.

Oliver Thansan
Oliver Thansan
14 May 2024 Tuesday 05:22
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Tourism accelerates the growth of the Valencian economy: GDP will increase by 2.1% in 2024

In the middle of BBVA's hostile takeover bid for Banc de Sabadell, the first entity's analysts presented this Tuesday the report that analyzes the situation of the Valencian economy in the first half of the year and also includes future forecasts. And its balance leaves a "dynamic" growth of the Valencian GDP with an increase of 2.1% in 2024 in which both the increase in Social Security affiliation, above that of Spain, as well as the good behavior of both national and foreign tourism, among other factors.

“Hotel occupancy is becoming seasonally adjusted, there is room to grow in winter. "Hotel occupancy tends to be higher because there is a very strong demand for tourism," said Rafael Domenech, head of economic analysis at BBVA Research, who appeared accompanied by the entity's director and not by those responsible for the entity on Tuesday. the territory as is usual in these informative meetings.

In its report, the entity maintains that the Valencian economy depends “crucially” on maintaining sales of goods and services to the Eurozone and higher margins in the tourism sector can give way to increases in investment and salaries. A scenario that is already occurring, since both the average daily rate and the average income per available room have increased since December 2023, above the Spanish average.

Regarding its forecasts, BBVA points to GDP growth of up to 2.1% in 2024 and 2% in 2025, when it predicts a “progressive” slowdown in the economy. Regarding employment growth, this will be 2.7% in 2024 and 1.7% in 2025, while the unemployment rate could go from 11.5% this year to 11.1% in 2025.

And although it points to a job creation of 103,000 jobs in the 2023-2025 biennium, it also denotes a lack of labor that could have an impact on the evolution of the economy. “We have been seeing for the last two years that the vacancy ratio is increasingly higher; Migratory flows are mitigating, but they do not prevent it from continuing to grow, so they are welcome but they are not enough to alleviate the need in the market,” explained the analyst. According to his figures, there are close to 10,000 unfilled jobs in the Valencian Community.

With respect to the real estate market, the entity explains that the Valencian Community shows a better evolution of home sales than in the country as a whole, with prices whose growth accelerated in 2023 to 5.7% year-on-year (3.9% in Spain).

Domenech recalled that "we have a problem of unsatisfied demand, with growth much higher than supply", a situation that causes great tension in the housing market." For this reason, he recommended the mobilization of supply, both in the construction of new construction as well as giving out the second hand.