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The Malaga economy is withstanding international tensions and growing fast

The presentation of the AEA report.
The presentation of the AEA report. / SUR
  • GDP in the province is expected to show an increase of 2.6 per cent by the end of the year, mainly thanks to exports, tourism and the property sector

The Malaga provincial economy is growing faster than that of the rest of Andalucía and Spain (which are more or less equal), and also faster than nearby countries. The commercial and geopolitical tensions which had been worrying analysts have not had the effects they feared so far, and unless there are any shocks between now and the end of the year (with Brexit in mind), 2019 will end with a significant increase in GDP of 2.6 per cent in Malaga and the Costa del Sol. This will be the highest in Andalucía, which is expected to be around 2.4 per cent, in line with Spain as a whole.

AEA says that employment is also expected to increase at a good pace. The economists at Unicaja estimate a growth of 2.5 per cent this year, and an 8.3 per cent reduction in unemployment. In absoloute numbers, this would mean more than 12,000 fewer unemployed compared with the average for last year (149,000).

It is more difficult to predict the rate of unemployment, because this depends not only on how many jobs are created but also movement in the active population in Malaga. Recently there have been continual increases in the number of people looking for work, which has slowed down the improvement in the unemployment rate. However, Felisa Becerra of the AEA says that if "the current rate of economic growth continues, the unemployment rate will also visibly reduce as well". In the first quarter of this year, the rate was 17.5 per cent.

The AEA report quantifies the growth in the Malaga economy during the first quarter of 2019 as 3.0 per cent, above the regional average (2.6 per cent) and the highest of all the Andalusian provinces. Good performance by exports, which increased by about six per cent, is one of the reasons for optimism, says Felisa: "The international commercial tensions are not affecting exporters in Malaga and Andalucía too much, because they are having most effect on industrial sectors and most of the products we send to the exterior market are agricultural". Positive results in the property and tourism sectors are other factors in the faster growth of the Malaga economy.

Labour market

With regard to the Malaga labour market, in interannual terms the active population has increased by 2.5 per cent, occupied jobs by 8.6 per cent and Social Security affiliations by 3.9 per cent, all of which are higher than the Andalusian average. By sector, employment in the construction sector rose by 23.9 per cent, industry by 18.7 per cent and services 7.9 per cent, whereas in the agricultural sector it fell by 26.8 per cent.

The report also shows that there are 136,900 people unemployed in the province, with an interannual reduction of 32,300. This is a drop of 19.1 per cent, compared with 15 per cent in Andalucía in general.

Many of the new jobs were in the residential property sector. In the first quarter of this year permission was granted to build 3,307 homes in Malaga, (57 per cent of the Andalusian total), which was the highest number since the fourth quarter of 2007 and an interannual increase of 70.5%. However, Analistas Económicos also warns that demand for housing "is slowing down in 2019".