The Andalusian Economic Observatory revises this year's growth upwards to 2.5%.

The Andalusian Economic Observatory (OEA) has revised its forecast for economic growth in Andalusia by one-tenth upwards to 2.6% in 2025, thanks to the boost from private consumption and investment , which is showing strength in the industrial sector.

The president of the OAS, Francisco Ferraro, and Pablo de Olvide University professor Manuel Alejandro Hidalgo presented the report on the Andalusian economy for the second quarter of this year on Tuesday, in collaboration with the Chamber Foundation. The report forecasts a slowdown in Andalusian GDP growth to 1.9% in 2026 , while the labor market will moderate its growth below GDP.

Ferraro pointed out that the economic landscape faces geopolitical risks and trade tensions stemming from US tariffs, but indicated that their impact on exports is limited to one or two-tenths of regional GDP growth in Andalusian economy.

Therefore, the slowdown will come from the traditionally very dynamic foreign sector, due to the impact of tariffs on the Andalusian agri-food sector , especially on oil, wine, and manufactured goods, although Ferraro has indicated that the impact could be mitigated by diversification into other markets.

The Spanish economy's performance is also very positive this year, with sectoral diversification providing stability to growth, and it will approach three percent growth, according to the OAS.

Andalusian growth this year will be primarily supported by the strength of private consumption due to household savings in recent years and the strong performance of the labor market, as well as investment, which has seen three consecutive positive quarters.

This is a "positive surprise," said Professor Manuel Alejandro Hidalgo, who noted that construction is also continuing its recovery process and services are maintaining a favorable trend. However, he specified that "it's not just tourism that's driving the economy, but professional, artistic, and communications activities, as well as business services, are also growing ."

"The composition of economic growth is reorienting itself toward greater sectoral balance ," Hidalgo stated, adding that this is not a change in the growth pattern. However, he emphasized that "it's not just tourism that's driving growth, but other sectors, such as industry, are doing so as well."

In this regard, he indicated that tourism has overcome the difficulties of the first quarter with improved performance in the second quarter, although more moderate than in 2024, and the primary sector has shown positive growth thanks to the rains this spring.

Domestically, the main challenge will affect the primary sector—which plays a significant role in the Andalusian economy—due to volatile raw material prices and weather effects, although the OEA forecasts a moderately positive trend.

Likewise, this organization believes that the implementation of European funds will be crucial to sustaining Andalusia's growth in a highly uncertain and risky international environment.