Galicia's Economy Shows Steady Growth Despite Persistent Challenges in Early 2026
Galicia shows positive economic growth and low unemployment in early 2026 but faces critical challenges in housing, wages, and demographics impeding broader prosperity.
- • Galicia's economic growth in 2025 was slightly below Spain's 3% but remains stable with positive outlooks for 2026.
- • Unemployment in Galicia stands at around 8%, with A Coruña nearly at full employment under 7%.
- • Despite employment gains, low wages and a significant housing shortage pressure workers, especially the youth.
- • Structural challenges include an aging population, low birth rates, and productivity issues requiring policy attention.
Key details
Galicia begins 2026 with optimistic economic growth forecasts, maintaining stability in employment yet grappling with ongoing structural and social challenges. According to economists Carlos Sánchez Tembleque and José Manuel Sánchez Santos, Spain closed 2025 with a strong 3% growth rate, one of the highest in the EU, while Galicia itself showed slightly more modest but positive development. The region's unemployment rate hovers around 8%, with A Coruña nearing full employment at less than 7%. This labor market strength, however, contrasts sharply with the persistence of low wages, particularly impacting younger workers struggling with rising living costs.
A foremost concern for Galicia is its housing crisis, where a significant shortfall in construction leaves an estimated demand of 2,000 to 3,000 new homes annually unmet. This scarcity has driven rents to consume up to 60% of workers' salaries, notably hindering youth independence and highlighting inequalities in quality of life despite employment gains. The region also faces deeper socioeconomic challenges, including an aging population, low birth rates, and limited productivity gains, which economists warn could undermine future growth unless addressed through talent attraction and improved immigration policies.
Economically, A Coruña stands out as Galicia's engine, accounting for nearly 47% of the region’s gross value added, bolstered by key players such as Inditex and an expanding digital sector. Experts stressed the need for comprehensive policy efforts focusing on housing, wages, productivity enhancement, demographic balance, and infrastructure improvements to translate positive economic indicators into real improvements for the populace.
These insights emerged during the ‘‘A Coruña Opina’ forum, shedding light on both the promise and pressure points that define Galicia’s economic landscape as it advances into the new year.
The national context, reflected in the recent announcement by Prime Minister Pedro Sánchez of the new sovereign fund ‘España crece’, underscores a similar commitment to sustaining investment and economic vitality across Spain beyond 2026. This fund aims to mobilize €120 billion to support sectors including housing and digitalization—areas critical for regions like Galicia. Sánchez emphasized Spain’s economic stability and growth as a secure investment arena, which bodes well for Galicia’s future economic prospects amid ongoing regional and national strategies.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
