Castilla y León's economy grows by 2.7% in 2023, driven by industry and driven by the primary sector

Castilla y León's economy grew by 2.7% in 2023, driven mainly by industry, services, construction and exports, a better-than-expected performance of 1.6, compared to the EU's national 2.5 and 0.5, once a decline. 2020's covid has recovered from previous years.

Carlos Fernández Garrido, Minister of Economy and Finance and Spokesman, described this Monday the regional accounting data for the fourth quarter and full year of 2023, as shown in 2024, where growth is predicted to be less than 1 .7%. The macroeconomic data used to prepare this year's social accounts are still being processed.

Five pushes and two delays

There are five factors that explain this greater growth than expected in 2023: the positive evolution of industry, 3.8%, services, 3.5%, construction 3%, investment promotion 3.2% and the contribution of six tenths of the foreign sector.

There are two elements that do not allow more growth in the economy, especially the negative data of the primary sector, which decreased by 8.7% in 2023, which adds -12.7 in 2022; And domestic housing demand rose 2.1%, one point lower than a year earlier, Carriedo compiled.

2023: First year of net growth post-Covid

Although the impact on Castilla y León's economy was limited, the head of economy and finance stressed that this 2.7% growth was the first net growth since Covid, as previous exercises allowed us to recover what was lost due to the pandemic. In other autonomies.

In 2023, the primary sector decreased by 8.7%, which is lower than that recorded in the previous year (-12.7%), mainly due to a small decrease in agricultural production in this season compared to the previous season, while productive livestock production recorded a greater contraction. than 2022.

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After the community closed in 2023 with the second-highest growth in industrial production, the industry grew by 3.8% compared to the 2% decline seen in 2022.

Among industrial branches, manufacturing branches grew by 1.5% compared to -0.3% in the previous year; And the supply of electrical energy recorded a significant increase in 2023 over the previous year.

Demand stagnates in housing

Construction is expected to grow by 3% as of 2022, due to “suppressed demand” in an environment of even higher interest rate levels, Carriedo analyzed.

As for the services sector, it rose 3.5%, down from 6.9% in 2022, due to lower increases in trade, transport and hospitality and declines in real estate, finance and insurance activities.

If the accounts are read from the demand side, the lower increase in GDP in 2023 is due to a lower increase in household final consumption expenditure (1.4% compared to 2.8% in 2022) and general administrative expenditure compared to the previous year (2.7%). % and 3.2% respectively.

Gross capital formation, i.e. investment, recorded a lower annual variation than in 2022 (3.2% and 3.5% respectively, due to lower investment in construction).

Investment in capital goods grew by 3.5% (-1.3% in the previous year) and construction saw a smaller increase than in the previous year (2.9% and 3.4% respectively).

First community in export development

Another positive aspect is the increase in exports of the community, which recorded the largest regional increase, with a positive contribution of six tenths to the growth of the regional economy, half a point more than in 2022.

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Total exports and imports (2.9% and 1.7% respectively) grew at a slower pace in 2022 (3.3% and 2.8% respectively).

In 2024: Better performance of primary sector is expected

For the current year, although the cooling of the construction sector may be reversed, Carriedo is confident of better performance in the primary sector after two years of poor harvests.

Carriedo estimates the contribution of European funds, which in 2023 will be the largest donation earmarked for resilience and new generation funds, which contributed a few tenths of regional GDP last year, and will be less in the current year.

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