Malaga's economy will grow more than the provincial average in Spain this year

Malaga is going to demonstrate another year of differential economic strength compared to the whole of the Andalucía region, Spain and the European Union. This forecast is shared, although with some discrepancies, by both the provincial association of economists and the regional economic research company run by Unicaja group, which published their economic forecasts on Wednesday.

Starting with the forecasts from Analistas Económicos de Andalucía from Unicaja, they calculate that, in 2024 as a whole, Malaga's economy registered a 4.4% growth, a far cry from the two Andalusian provinces that followed behind in the ranking, Seville and Almeria, which grew by 3.3%. That lower growth rate is practically the same as for the whole region that, in turn, beat the rise in national GDP (gross domestic product rose by 3.2%). For this year, these Unicaja analysts forecast growth of 3.5% for Malaga, one point above the Andalusian average (2.5%), a figure that Seville is expected to match, but a long way ahead of the figures anticipated for the provinces forming the tail end for the region's economy, Huelva and Cordoba, whose growth will be limited to 1.8%. Growth in Jaen and Cadiz is expected to be slightly above 2%. For Spain as a whole, an expansion of 2.4% is anticipated.

Still with the Unicaja economists, they view internal demand, tourist activity and the positive progress in employment as the factors behind the significant growth recorded last year for Malaga. Meanwhile, a more moderate growth in activity is anticipated for the current year, a slowdown that may perhaps be more pronounced, given that this research group concedes that its forecasts do not yet incorporate the impact of the trade war that the United States has started and which "will undoubtedly affect growth." Their report states: "It is difficult to anticipate what the outcome of this situation may be, with announcements of measures, countermeasures and extensions." In any case, they are confident that this year the provincial economy will once again be able to count on domestic demand as an ally, especially private consumption, given the favourable trend in employment. In this regard, these economists point out that Malaga was last year's fastest growing province in terms of Social Security signings and that, in the first months of this year, it is repeating that success alongside Jaen. That said, they are also warning of a more moderate increase in tourist demand.

With regard to the year 2026, Analistas Económicos de Andalucía forecasts growth of 1.9% for the whole region (this figure is no longer available with a provincial breakdown), a figure similar to the Spanish average. "The growing trade tensions are the main element of risk for these projections, due to their potential impact on global activity, inflation and supply chains, in a context already marked by the weakness of the main economies of the Eurozone," says the Unicaja report.

Turning to Malaga's association of economists, it puts the province's economic growth at 2.8% for 2025, a figure that contrasts with its forecasts of 2.2% and 2.6% growth rates for Andalucía and Spain respectively. It also places growth in the Eurozone at only 1% this year, which implies that the growth rate of Malaga's economy will be three times faster than that of Europe. In any case, the association does not rule out the possibility of downscaling these figures in light of how the trade war develops. Javier Font, secretary for this association, provides a summary: "Malaga presents better figures than Andalucía and Spain, although we must also take into account some negative data, such as inflation, which is above average, as well as the lack of housing supply, which significantly pushes up the price of housing."

To this, Manuel Méndez, dean of this Malaga association, added another problem related to housing, namely the lack of transport infrastructure for those seeking to live a more comfortable life outside Malaga city. "It is clear that transport is essential to move people around. We also have a very important logistics sector. The lack of infrastructure makes transport more expensive. In Malaga we have mountains, sea, tourist areas to the east and west, lack of land.... And not everyone has the possibility of teleworking or being a digital nomad. The development of infrastructure is essential to homogenise the whole area, to ensure there is no concentration of companies in some areas and there are other places where they can also expand." Méndez also warned that "this issue", due to the cost of housing and infrastructure, "is going to take its toll."

Regarding risks other than those already mentioned above, the Colegio de Economistas mentioned a few more. Obviously the tariff war can be seen as the main risk for economies, above all for SMEs (small- and medium-size enterprises), because large companies have more tools at their disposal to defend themselves. The association also pointed to other elements of uncertainty including public debt and productivity: "These are issues that require far-reaching reforms and they must be addressed when the economy is doing well, not when it is faltering."

Economic growth is supported by a healthy labour market, and vice versa. The Malaga association of economists, for example, points out that job creation in Malaga exceeds the average for Andalucía and that a quarter of the working population of Andalucía is in Malaga. Meanwhile, Unicaja forecasts that the number of employed people in the whole region will increase by 2% this year, an expansion that will reach all sectors, especially services. At the same time, the number of unemployed will continue to fall, as will the unemployment rate, despite the fact that the growth in the working population will continue to be very strong.

Optimism regarding the evolution of employment in Malaga may be fuelled by another fact highlighted by Javier Font: business and management confidence in the province is above the Spanish average. However, there is a catch to consider in a sector that drives the province's economy: in the first quarter this year there was a 10% drop in the number of visitors staying, mainly due to the fall in the number of domestic travellers when compared to the number of foreign visitors, which has remained practically stable. "The following interpretation can be made: the high price of our province compared to other destinations. Perhaps we are touching sensitive ceiling prices, but not yet too high for foreigners' pockets."

These economists also emphasise that construction is another driving force in the province, in addition to bidding and investment and, while business creation is faltering in numbers, those that do emerge are doing so with better capital behind them.