Malaga will be Andalucía's fastest growing province this year, Unicaja says

Malaga province's economy will grow 2.4% in 2026, according to forecasts by Analistas Económicos de Andalucía, part of the Unicaja Group. This represents a slowdown compared to the 3.7% GDP growth rate in 2025.

It also, however, means that Malaga will be the most dynamic province in Andalucía, with growth exceeding the 2% estimated for the regional economy as a whole.

Furthermore, the Costa del Sol province will once again outperform the national average, for which the Bank of Spain forecasts growth of 2.3%.

The growth forecast for Malaga is 0.1% higher than that of Seville (2.3%), while Cadiz is expected to grow by 2.2% and Granada by 2%. The remaining Andalusian provinces are to experience growth below the overall regional average, with Jaén at the bottom (1.3%).

At the same time, Jaén, will be the only province to improve its figures compared to 2025, as its GDP remained virtually stagnant last year, with an increase of just 0.1%.

The rest of Andalucía's provinces will experience a slowdown similar to Malaga's. The regional GDP will fall from 3.2% in 2025 to 2% in 2026. However, the most abrupt slowdown will be in Huelva, whose 5% growth rate last year will drop to 1.5% this year. Seville will see its growth rate plummet from 3.6% to 2.3% year-on-year.

According to the report, domestic demand will drive Andalucía's growth this year, especially household consumption. However, the report warns that the international context, the impact of the floods at the beginning of the year and problems with transport infrastructure could hamped the economy.

The report says that the conflict in the Middle East could also impact tourist demand. "Although there could be some redirection of tourist flows, (tourist demand) may be affected by the increase in energy prices and fuel shortages if the conflict in the Middle East continues."

In the final months of 2025, while overnight stays by residents decreased in Malaga (and also in Huelva and Seville), an increase in foreign demand offset this, allowing the province to finish the year with 0.5% growth. The first few months of this year indicate an increase in both domestic and foreign visitors.

Global economic prospects have weakened due to the energy crisis and geopolitical risks. Although, according to the OECD, global growth has remained stable in the early stages of this year, supported by technological production, the reduction of tariffs imposed by the US and the carryover effect of 2025, the conflict in the Middle East, particularly the situation surrounding the Strait of Hormuz, threatens to hinder global growth and intensify inflationary pressures.

"The war and the uncertainty it has generated (at levels not seen in recent decades) have become the main risk factor for the economy," the report warns.

Analistas Económicos de Andalucía's report echoes projections from the European Central Bank, which expects the negative impact of the war on commodity markets, real incomes and consumer confidence to remain concentrated in the second and third quarters of this year.

The economy nevertheless benefits from several protective factors, including low unemployment, strong private-sector balance sheets, and public spending on defence and infrastructure, all of which should continue to support global economic growth.

Under the central forecast for Andalucía's economy this year, regional GDP growth should generate employment growth of 2.5%, driven mainly by industry and construction. Although this represents a slower pace than last year's 3%, it should still help reduce the unemployment rate to an average of 14.3% this year, down from 15.2% in 2025.

At provincial level, the report notes that data from the first months of 2026 show positive growth in Social Security registrations across all provinces, although at a more moderate pace than in 2025. Málaga continues to lead the way, recording growth of 3.5%, compared with the Andalusian average of 2.2%. Huelva trails behind at 1.2%.

This follows strong labour market performance in the fourth quarter, when employment growth exceeded 5% year-on-year in Malaga, Jaén, Huelva and Cadiz. Malaga posted the strongest increase, with growth approaching double digits. The Costa del Sol province also recorded the fastest rise in employment during the second half of the year, largely driven by the services sector.

According to Analistas Económicos de Andalucía, Andalucía's economy will expand by 1.8% in 2027. While slightly below this year's forecast, that figure would remain broadly in line with growth across Spain as a whole. The consultancy expects employment to increase by 1.5%, while the unemployment rate should fall further to 13.7%.

However, the report warns that a more intense or prolonged conflict in the Middle East could weaken economic growth and result in lower-than-expected expansion rates. It also stresses that the rapid growth of the region's labour force is slowing the decline in unemployment, despite the strong pace of job creation across Andalucía.

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