Extremadura's Economy Projected to Grow 2.3% in 2025 and 1.6% in 2026 with Employment Gains

According to the eighth 'Economic Forecasts for Extremadura' report by Unicaja, Extremadura's GDP is expected to grow by 2.3% in 2025 and 1.6% in 2026. Employment in the region is also projected to rise by 1.7% in 2025 and by 1.3% in 2026. These forecasts come against a backdrop of moderate economic resilience nationally, with Spain’s economy expanding by 0.8% in the second quarter of 2025 and an annual growth estimate of 3.1%, double the Eurozone average.

Extremadura’s GDP growth stood at 0.3% in Q2 2025, below the national average, with retail sales improving and exports of goods increasing by 9.1% during the first half of the year. However, industrial production declined, and the agricultural sector saw a downturn. The service and construction sectors emerged as the main growth drivers. Employment numbers have improved with a 2.8% annual rise in workforce employment, despite a 3.4% increase in unemployment that led to a 15.5% unemployment rate.

Unicaja's forecasts project unemployment to ease slightly from 15% in 2025 to 14.2% in 2026. Provincially, Badajoz and Cáceres are expected to grow by 2.3% and 2.1%, respectively, in Q2 2025. Meanwhile, an electoral debate in Mérida touched on economic and employment topics but yielded no new proposals, with candidates maintaining their existing positions.