The Catalan economy is growing more than Madrid's.

BarcelonaThe Catalan and Madrid economies began the century with the same level of growth. But from 2001 to 2023, Madrid, in general terms, saw its gross domestic product (GDP, an indicator that measures the size of an economy) grow more than that of Catalonia. In fact, according to data from the National Institute of Statistics (INE), the economy of the region presided over by Isabel Díaz Ayuso grew on average between 2001 and 2023 by 1.8%, while that of Catalonia grew by 1.1%.

But in 2024, the Catalan economy managed to grow more than that of Madrid. In fact, by another three-tenths. Madrid, according to data published this Monday by its regional government, grew by 3.3%, while Catalonia, according to data from Idescat (the Statistical Institute of Catalonia). grew by 3.6%In both cases, both communities improved their economies above the national average, which increased its GDP by 3.2%.

In fact, this century, Madrid's GDP has almost always grown more than Catalonia's, except in 2001, when they grew equally; in 2010, when, in the midst of the crisis, Catalonia was able to recover somewhat more thanks to tourism; in 2013, when the Catalan economy fell less than Madrid's; and in 2014, when the recovery in Catalonia was more powerful than that of the regional capital. But in 2014, they already grew equally, and from that moment on, Madrid maintained a growth rate higher than Catalonia's until 2021, when Catalonia, following the pandemic, recovered more strongly. But in 2022, Madrid again overtook Catalonia, and in 2023, both economies grew equally.

Now, Catalonia is clearly dominating. There are several factors that explain this phenomenon. According to economist Àngel Hermosilla of the College of Economists of Catalonia, the explanation "must surely be found in the difference in the weight of the different sectors in each of the economies." One factor that explains the difference is the driving role of tourism. "The year 2024 has been a record year for tourists in Catalonia," says Hermosilla. In fact, the Principality is the leading region in the country in this sector. Other factors include the strong performance of domestic consumption in Catalonia and, finally, the strong performance of industry in the Principality and the strong export pace it has maintained despite the weakness of important trading partners such as France and Germany.

Weight of Tourism

A clear example of the importance of tourism: the services sector in Catalonia (which includes part of tourism) grew by 4.1%, while in Madrid it grew by 3.6%. And a sector as important in terms of its weight as industry in Catalonia improved by 3.9% in 2024, while in Madrid, where its weight is not as significant, it only grew by 1.1%. These are not the only indicators in which Madrid lags behind Catalonia. For example, the Minister of Economy, Finance, and Employment of Madrid, Rocío Albert, boasted today about the good performance of consumption and investment in her region. According to the data released by the region, consumption grew in Madrid by 3.3% in 2024, and investment by 2.8%. And the improvement in domestic demand was 2.8%. In Catalonia, according to Idescat, domestic demand grew by another point, 3.8%, with consumption growing by 3.5% and investment improving by 3.2%. In other words, all three indicators performed better in Catalonia than in Madrid.

"Aggregate demand is also an element that may explain why Catalonia is growing more," says Hermosilla, who points out that consumption may account for 60% of GDP. A key factor in Catalonia's growth is precisely the consumption of residents abroad, that is, basically the consumption of tourists, which increased by 11.8%. This factor is especially important because Catalonia leads the reception of foreign tourists in Spain and also tourism spending.Another factor driving Catalan growth is exports. In 2024, they increased by 1.8% to exceed €130 billion. But more importantly, Catalonia accounts for more than a quarter of all Spanish exports (26%, according to data from the Ministry of Economy, Trade and Enterprise), while Madrid's share did not reach 13% and barely reached €49 billion in value.

Madrid's Minister of Economy also focused on the Madrid labor market, with 3.77 million Social Security affiliates (the same as Catalonia) and an unemployment rate of 8.6%, two percentage points below the national average. An unemployment rate that in Catalonia, According to the latest active population survey (EPA), it stands at 7.9%., below the level of Madrid and almost three points less than the national average.