The Economy of the Region Exceeds Expectations and Will Grow by 2.7% in 2024

The economy of the Region is better than expected. The second quarter of 2024 closed with advances higher than forecasts, with a quarterly growth of 0.7% and an annual rate of 2.8%, according to data from the Valencian Business Confederation (CEV), who state that these figures "are higher than expected and represent a turning point compared to the previous trajectory and the beginning of a period of mild economic slowdown in Valencia."

Thus, the business organization's forecasts point to a growth around 2.7% by the end of the year. It is expected that, from a demand perspective, better financing conditions will drive advances in private consumption and investment, along with the deployment of NG funds.

However, growth "will not be homogeneous among sectors and their productive branches, but overall it will continue to generate employment and reduce unemployment." The CEV assures that the extension being observed in the tourist season "will favor the external demand for services, but goods demand will still suffer due to the prolonged sluggishness of major destination markets."

The Director of Economy and Analysis at CEV, Ricardo Miralles, expresses concern about the structural situation on the supply side, especially in the primary sector, which is going through difficult times, as well as in manufacturing branches. "Other traditional branches, such as 'textiles' and 'leather and footwear' are showing an adverse situation and worse ratios than their national averages," emphasizes Miralles.

Looking ahead, the Director of Economy explains that the growth rate is "notable, although lower than that of the previous quarter, with a high degree of heterogeneity among productive branches." According to the Economic Outlook Report prepared by CEV, companies continue to face "an increase in labor costs and high levels of raw material prices."

The CEV insists that all productive branches have difficulties finding personnel and criticizes unfair competition and continuous "excessive regulations."

In light of the conclusions drawn by the report, the business group emphasizes the need to "maintain a favorable climate for business activity and investment, which will promote advances in productivity and competitiveness for Valencian companies."

Therefore Miralles insists that support from the Administration is necessary for certain sectors and productive branches undergoing profound structural changes and particularly adverse conditions."

"At a regional level this support is not possible if the Regional Financing System does not provide the necessary resources to adopt economic policy measures in support of these sectors," expresses CEV, insisting on "the necessary change in the Regional Financing System, which should be negotiated multilaterally and include a transitional leveling fund as well as forgiveness of part of Generalitat's debt caused by the outdated financing system."