Communities face 28M with higher growth levels than in 2019, but the gap between rich and poor remains

Twelve autonomous communities have an appointment with the polls on May 28. The regional elections come at a time of economic recovery that puts the finishing touch on a legislature marked by the pandemic. Although not all communities are expected to recover their 2019 GDP level throughout this year, some have already done so and all are facing the elections with higher growth forecasts than those registered four years ago and lower unemployment rates. except in Navarra and the Balearic Islands. However, the gap between the regions with the highest and lowest levels of GDP per capita remains practically intact.

According to the latest forecasts from the Fundación de Cajas de Ahorros (Funcas), four of the communities that will go to the polls on 28-M would have already recovered their pre-pandemic GDP levels in 2022. Castilla-La Mancha, Navarra, Murcia and Aragón will foreseeably be added throughout this election year by the Community of Madrid, La Rioja and the Valencian Community, thanks to growth rates of over 4.5% forecast for 2023, plus higher in all the autonomies than those registered four years ago, when the national average stood at 3.5%.

Excluding the four communities with their own electoral calendar -Andalusia, Catalonia, Galicia and the Basque Country- and Castilla y León -held elections in 2022-, the autonomies that grew the most in 2019 were Madrid, Navarra and the Balearic Islands, with GDP increases of between a 4.6% and 3.6%. Of these three, only the Mediterranean archipelago remains on the podium of economic growth four years and a pandemic later, leading the economic forecasts with a GDP increase of 8.7% by 2023, according to Funcas, thanks to the recovery of tourism. They are followed by the Canary Islands and Aragon, whose economies are expected to grow by 6.4% and 5.8% respectively throughout the year.

On the other hand, among the twelve communities that will hold elections on 28-M, the ones that grew the least in 2019 were Extremadura, Castilla-La Mancha and Asturias, with advances of between 1.9% and 2.1%.. Only the community chaired by Adrián Barbón persists four years later among those with the lowest growth forecasts for 2023, although the 4.7% expected for this year far exceeds the data from the previous electoral year. They are accompanied at the bottom of the table by Navarra (4.8%) and La Rioja (4.7%).

However, the distribution between richer and poorer communities has hardly changed in the last four years.. As was the case in 2019, among the twelve autonomies called to the polls in less than two weeks, Madrid, Navarra and Aragón continue to be the ones with the highest GDP per capita, with a respective wealth of 39,415, 35,007 and 33,559 euros per inhabitant.. On the contrary, Extremadura, the Canary Islands and Castilla-La Mancha maintain the lowest levels of GDP per capita -between 21,973 and 23,172 euros-, according to Funcas forecasts for 2023.

The Bank of Spain recently warned that economic convergence between Spanish regions has stalled after the 2008 financial crisis. According to the financial authority's analysis, work productivity is the most important factor in explaining both the rapprochement between communities in terms of per capita income between 1980 and 2008 and the subsequent stagnation. “The process of population aging in the most recent period, especially pronounced in the regions with the highest per capita income, has contributed to the reduction of the differences, although not with sufficient intensity to offset the effect of the other factors,” adds the report.

drop in unemployment

As far as unemployment is concerned, the situation in the majority of the communities that hold elections on March 28 is better than it was four years ago. All communities currently present lower unemployment rates than those of the first quarter of 2019, with the only exceptions being Navarra and the Balearic Islands, where unemployment has grown by 3.94 and 1.08 points in the last legislature. According to the Active Population Survey (EPA), in the first quarter of 2023, the average unemployment rate in Spain as a whole stood at 13.26%, almost 1.5 points below the 14.7% of the same 2019 period.

By autonomies, the decreases of around three points in the Canary Islands, Cantabria and Extremadura stand out, with Aragón, Cantabria and La Rioja currently having the lowest levels of unemployment, with rates of 8.94%, 9.29% and 10 .06% respectively. On the other hand, Extremadura, the Balearic Islands and the Canary Islands are the regions with the highest levels of unemployment among the twelve that have elections this May, with rates of 19.53%, 18.14% and 17.17%.

On the other side of the coin, despite the drop in unemployment, the activity rate also fell slightly in the first three months of 2023 compared to the first quarter of 2019 in five of the twelve regions contesting the elections for the 28-M, specifically in Asturias, the Balearic Islands, the Canary Islands, Cantabria and the Valencian Community. The challenge for many of the governments that are formed after the elections will be to continue on the path of economic growth and the reduction of unemployment to create opportunities for their citizens.