Andalucía's economic growth is ahead of Spain's, boosted by industry and investment

In 2025, Andalucía's economy grew beyond the Spanish average due to greater industrial productivity, increased investment and advanced services that have taken its business fabric to record highs, according to the latest report from the regional ministry for the economy, presented at this Wednesday's meeting of the Junta's governing council of ministers.

The Junta's balance sheet reflects that Andalucía's gross domestic product (GDP) grew by 3.2 per cent, four tenths above the Spanish average, which stood at 2.8 per cent. Furthermore, this is double the growth recorded in both the Eurozone and the European Union (EU) as a whole, with growth rates of 1.5 per cent and 1.6 per cent respectively.

The report highlights the leading role that the region's economy played last year, thus confirming the strengthening of Andalucía's production model and its progress toward convergence with the wider Spanish economy. This economic dynamism is underpinned by progress made in the industrial and advanced services sectors, reflecting a transformation of the production model towards sectors that generate greater productivity, innovation and internationalisation, according to the Junta report.

Specifically, the region's industrial sector experienced a 9.6 per cent increase in 2025, which is four times the average growth rate for industry in the rest of the country (2.3 per cent). Meanwhile, professional, scientific and technical activities grew by 5.9 per cent, also exceeding the national average (5.5 per cent).

On the demand side, the most dynamic component has been investment, which has grown twice as fast as the economy as a whole, 6.4 per cent compared to 3.2 per cent real GDP growth, increasing its share of GDP to 19.2 per cent, the highest level in the last 15 years.

Along these lines, Andalucía is also attracting flows of productive foreign investment, nearly 1.091 billion euros in the first nine months of 2025, a record high for the same period since 2010. This is a growth rate of 76.8 per cent year-on-year, in a context of decline for Spain overall (-27.5 per cent).

Furthermore, the foreign sector and the attraction of capital have played a fundamental role in the strong performance of the regional economy, according to the Junta report. This has allowed the region to position itself as having the second highest positive balance in the relocation of company headquarters, with a net gain of 78 companies that chose the region to establish their operations last year.

Added to all this is the increased dynamism of job creation and a significant reduction in unemployment, which, being higher than GDP growth, translates into productivity growth (0.2 per cent).

According to the labour force survey (EPA), the employed population in Andalucía increased by 3 per cent in 2025, almost half a percentage point above the Spanish average (2.6 per cent), reaching an all-time high. This makes Andalucía the second autonomous region, after Madrid, with the largest increase in employment in absolute terms, with an average of more than 103,400 new jobs per year.

The report also notes that the increase in employment during 2025 was more pronounced among women (3.3 per cent), the under-25s (6.1 per cent), employees with permanent contracts (4.3 per cent), full-time workers (3.5 per cent) and those with university degrees (3.7 per cent). The Junta report stresses that "the most vulnerable groups have benefited the most, while progress has been made in the quality of the jobs created".

The increase in employment has outpaced the addition of new workers, leading to a significant reduction in the number of unemployed and the unemployment rate, which closed 2025 at 14.7 per cent, the lowest in the last 18 years.

The gap with Spain's unemployment rate (9.9 per cent) stands at 4.8 percentage points, the lowest year-end figure since 2007. Notable decreases in the unemployment rate are evident among the younger population (down 4.5 points in the under-25s) and in industry (-2 percentage points), where the unemployment rate has reached a record low of 3.9 per cent.

In short, the regional government stated that these "results of economic growth and job creation" have been made possible thanks to the favourable business climate and the stability provided by Andalucía.

These factors have contributed to the increase in the number and size of businesses and have boosted business confidence in the economy's performance, which grew by an average of 1.7 per cent last year, exceeding the national average of 1.0 per cent.

Specifically, the number of companies registered with Social Security reached an all-time high of 270,842 at the end of 2025, with Andalucía accounting for 42 per cent of all business growth in Spain.

The report also highlights the 6.4 per cent increase in the number of large companies, exceeding the growth rate for such companies across Spain (3.6 per cent), a key factor in improving Andalucía's economic convergence. This growth helps to correct one of the structural deficits of the regional economy and also increases the solvency of the production system to face future investment and productivity challenges.

The report then mentions the notable increase in the presence of Andalusian companies in international markets. During 2025, Andalusian exports overseas reached a value of 40.433 billion euros, the second highest figure since records began. This also means that Andalucía is the third largest region in Spain for exports, only behind Catalonia and Madrid.

This growth is primarily driven by non-energy exports, which have continued to grow at a high rate of 4.1 per cent, more than double that of Spain (up 1.8 per cent). Andalucía also recorded a trade surplus of 572.2 million euros, a situation that contrasts sharply with Spain's trade deficit of nearly 57.055 billion euros.

The regional government has noted that this economic growth has occurred under favourable nominal conditions, whichh also provide stability and have allowed for the recovery of workers' purchasing power.

The inflation rate closed the year at 2.8 per cent, also below the Spanish average (2.9 per cent), with core inflation, the most structural component of prices, being even more moderate at 2.5 per cent in December, also lower than the national average (2.6 per cent).

This increase in consumer prices was lower than the growth in employee compensation, which rose by 4 per cent for the year as a whole, thus contributing to this recovery in workers' purchasing power of workers.