Canary Islands, the region where GDP grows the most in 2025

Canary Islands will be the autonomous community where its gross domestic product (GDP) will grow the most in 2025, specifically 3.4%, according to the forecast of the BBVA research service.

And it will do so thanks to the strength of tourism, especially foreign tourism, whose spending in the Canary Islands continues to grow - 17% more in the first quarter - and the increase in household consumption.

But BBVA Research points to other factors that explain these favorable prospects, such as the improvement in productivity per hour, but not per worker, which remains "stagnant"; the investment of tourism companies and the fall in the price of fuels and interest rates.

However, for 2026, it forecasts a lower growth of the Canary Islands economy, specifically 1.7%, due to geopolitical and commercial uncertainty due to the tariffs announced by the Trump administration, despite its direct impact on the islands being reduced, but it would cause "volatility" in the financial markets.

Be that as it may, at the moment no "significant signs of deceleration" are seen, highlighted Miguel Cardoso, head of BBVA Research in Spain, at the presentation of the BBVA Research economic outlook report, accompanied by the bank's territorial and regional directors in the Canary Islands, Quim Soler and José Manuel Martín.

Thus, if these forecasts are met, the archipelago's GDP will exceed the pre-pandemic level (2019) by 12 points next year, "one of the most intense recoveries within Spain".

BBVA Research warns in any case of several "bottlenecks" that may hinder the Canary Islands economy, the main one being the shortage of affordable housing.

Based on the evolution of building permits, the research center forecasts that the number of homes built will barely cover 20% of the households created, half that in the country as a whole, which "will very likely continue to put high pressure on prices", warned Miguel Cardoso.

He also pointed to the possible impact of the fiscal consolidation process and the uncertainty about how the "growing spending needs" will be financed due to the aging of the population and greater investment in Defense.

The BBVA Research economic outlook report makes another warning about the increase in labor costs in a context of increasing wages, increased Social Security contributions and non-wage costs.

Above all, it adds, "if the changes" in the working day promoted by the Government are confirmed.

Miguel Cardoso has demanded for the Canary Islands, a community with the highest percentage of workers with working days exceeding 37.5 hours per week, aid so that companies, mostly SMEs, can "absorb these higher costs" without employment being affected.