The Canary Islands’ economy is poised for a moderate growth of 1.5% this year, following a robust expansion of 3.9% last year, surpassing the national average by 1.4 points. These figures were disclosed on Thursday by the Chamber of Commerce of Santa Cruz de Tenerife. Remarkably, the Gross Domestic Product (GDP) has already rebounded to exceed pre-pandemic levels by 15%, reaching 54,240 million euros.
The Economic Outlook Bulletin for the fourth quarter highlights growth across all sectors compared to the previous year. Leading the charge is the services sector with a 3.2% increase, followed by the industrial sector at 2.3%, construction at 1.2%, and the primary sector at 0.4%.
Santiago Sesé, the president of the Chamber, hailed the strong performance of the Canary Islands’ economy in the latter part of the year, stating, “We’ve experienced a much more positive conclusion to the year than anticipated, evident across all sectors of our economy. This has propelled our growth beyond our initial forecasts.”
These results underscore the resilience of the Islands’ economy, buoyed by tourism activity and its wide-ranging impact on various sectors and employment. Despite uncertainties, the economy has demonstrated its capacity for continued growth.
In terms of employment, the Labour Force Survey (EPA) indicates significant growth, with an increase of 26,100 workers last year, surpassing one million workers for the first time on the islands. However, this improvement was counteracted by a rise in unemployment by 27,400 individuals, bringing the total number of unemployed to 196,400, attributed to a continuous increase in the active population.
CANARY ISLANDS: GROWTH DESPITE THE SLOWDOWN
Despite the growth, structural challenges in the labour market have prevented a decrease in the unemployment rate, which stood at 16.19% at the end of the year, 1.6 percentage points higher than the previous year and 4.4 points above the national rate.
Lola Pérez, Director of the Santa de Tenerife Chamber of Commerce, emphasized the consistent economic growth in the islands over the past eleven quarters, despite a slowing trend. The year-on-year growth rate of 2.8% exceeds the national average, largely driven by tourism’s influence on the economy.
Manuel Afonso, territorial director of CaixaBank in the Canary Islands, highlighted the continued dynamism in lending to families and companies, alongside a minimal non-performing loan ratio, which bodes well for economic stability and growth.
SAVINGS RATE RISES
Household indicators also reflect positive trends, with gross disposable income increasing by 10.6% year-on-year and final consumption expenditure rising by 4.5% in the fourth quarter of 2023. The resulting savings rate of 11% suggests potential for sustained household consumption growth, supporting the overall Canary Islands economy.
Looking ahead, the Chamber of Commerce calls for effective management of the Next Generation Funds in the Canary Islands, stressing the importance of public-private collaboration for the region’s transformation in key areas such as sustainability and digitalization.
Sesé also advocates for prudent fiscal policies that prioritize public investment and tax reduction, while ensuring the preservation of public services and the welfare state. He underscores the need for an efficient and productive administration to instill confidence among local and foreign investors, facilitating continued investment and job creation for the region’s prosperity.
