They warn of an exhaustion of the post-pandemic economic cycle in Lanzarote

The exhaustion of the economic cycle that followed the covid-19 crisis condemns the Canary economy to continue growing in 2027, but less than in 2026 and, even, to periods of decrease, according to the analysis by Corporación Cinco.

This was stated this Monday by its consulting director, José Miguel González, before presenting the report "The economy of the province of Las Palmas in graphs", relating to 2025 and in which Caixabank and the business circles of Lanzarote and Gran Canaria also participated.

This study reflects in figures not only a cyclical aspect of the economy of this province and each of the islands that compose it, but the trend of the last 10, 15 and even 25 years, explained González, who highlighted the demographic growth that immigration has fostered, since fertility rates have decreased and even vegetative growth rates are negative.

As a consequence of this phenomenon, a progressive population aging is detected, which is reflected in an inverted pyramid.

The economic growth of the Canary territory has evolved positively, which has been reflected in employment, despite occasional decreases in the unemployment rate.

González recalled the "rebound effect" that the covid-19 pandemic produced in terms of economic growth and which allowed a declining cycle to be redirected, to affirm that currently, beyond the geopolitical conflicts and exogenous factors to which the Canary Islands show high vulnerability, "we are also witnessing a certain slowdown in the growth rate" which, however, will end the year being positive, but somewhat lower than that of previous years.

This behavior is associated with the exhaustion of the economic cycle itself, to which are added, in the case of the Canary Islands, where "record figures in tourism are still being registered," "difficulties" related to problems in finding certain professional profiles and the scarce supply of housing, which prevents people who want to come to the islands to work from being integrated into this market.

Despite this, González does not rule out that in 2027 there may be occasional increases in the unemployment rate in the Canary Islands as a consequence of the incorporation of the active population that is progressively joining, and also some decrease in the economy in some quarter due to the increase in the price of oil if instability in Iran continues.

Regarding domestic demand, the director of consulting at Corporación Cinco highlights that "it is favorably affected by the decrease in unemployment rates," something that causes "a significant increase in income levels," which, along with public spending, "replaces the occasional drops in external demand."

"When this employment begins to slow down or if in a specific quarter GDP decreases appear, that domestic demand will decrease, but, at a minimum, the debt levels are, fortunately, very controlled by private agents and the level of progress is being sustained for now," he stated.

Asked about the evolution of wages in the Canary Islands, González recalled that this indicator is analyzed at a regional level in the "Labor Costs Survey" and added that the provincial report presented this Monday does evaluate "productivity, which is precisely what remunerates wages."

Improving wages, the pending issue for the Canary Islands

In his opinion, "one of the pending issues for the Canary Islands economy is how to establish improvements in the remuneration of staff, of professionals, because productivity conditions improve. Until this happens, productivity will remain low and, therefore, wages too."

However, he did specify that when it is said that the Canary Islands have wages below the national average, it is referring to "its average component."

"The average wage is lower because the group of people with lower wages compared to the rest of the national territory is larger. That is to say, for the same occupation, it does not mean that one earns less in the Canary Islands. What happens is that those professions with lower added value, lower productivity, and therefore lower wages, are more abundant in the Canary Islands than in the rest of the national territory," he asserted.

For the territorial director of CaixaBank in the Canary Islands, Manuel Afonso, "the numbers in the province of Las Palmas and in the Canary Islands in general are doing reasonably well" and are better than those of 2025, despite the risk posed by the geopolitical environment.

"The uncertainty in the global environment is significant. However, this is not holding back investments at all, it is not detracting from tourism, quite the opposite, it continues to rise, and other activities too," he highlighted.

This juncture is also being used "to diversify our economy as well" through digitalization, hand in hand with the digital talent that exists on the islands, he has elaborated.

Afonso has stressed that, "for the moment, the economy is doing well," partly because "Canarian companies are very strong, their balance sheets are much stronger right now than in previous years or even previous crises. And not only companies, but also the family economy. We see that deposits, savings are at their peak. In general, I think we are in a much better situation to face a difficult situation that may come in the future, which surely will come, as this is cyclical."