Only seven autonomies will have unemployment of more than 8% next year, according to Funcas

The strong pull of the Spanish economy that has been experienced in recent years is making it easier for the country to significantly reduce its unemployment rate. So much so that, according to the latest macroeconomic projections for the autonomous communities prepared by Funcas, Next year there will only be seven autonomies with an unemployment level higher than 8%.

In 2025, there are already four autonomies that have reached that milestone. These are the Basque Country, with an unemployment rate of 6.9%, Cantabria (7.1%), Navarra (7.1%) and Aragon (7.6%). If the forecasts of the study center of the old savings banks come true, In 2026, six more communities will be added to this list. Specifically, the Balearic Islands (8.5% unemployment in 2025), Castilla y León (8.3%), La Rioja (8.1%), Catalonia (8%) and Galicia (8%) will fall below the 8% barrier.

Funcas’ forecasts indicate that the Basque Countrywith an unemployment rate of 6.4%, it would be the autonomy with the lowest level of unemployment in Spain in 2026, closely followed by Cantabria (6.6%), Aragon (7%), Navarre (7%), Rioja (7.1%), Galicia (7.4%), Madrid (7.4%), Catalonia (7.7%), Castile and León (7.7%) and Balearics (7.9%). Within the northern half of the country, only Asturias (8.4%) would be above the 8% barrier.

These unemployment levels little by little they begin to resemble the references that are common in Europealthough they are still above. For example, next year there would be seven autonomies with an unemployment rate equal to or lower than that of France, which currently stands at 7.7%. However, there is still a way to go to get closer to the average of the euro countries, which stands at 6.4%.

The path taken since the pandemic is striking. At the end of 2019, no autonomous community registered an unemployment rate of less than 8%. In fact, to find a moment in the recent history of Spain with more territories below that reference, we must go back to the spring-summer of 2007. Then, the labor market was growing, doped by the real estate bubble that would burst shortly after with catastrophic consequences. At that time, only five territories (Andalusia, Asturias, the Canary Islands, the Valencian Community and Extremadura) exceeded 8%.

If Funcas’ forecasts materialize, a good part of the national territory would be gradually approaching a situation similar to full employment in 2026. An economic term that implies that almost everyone who wants to work can do so. The unemployment that persists in this situation is due to people changing jobs, seasonal unemployment, training…

The north-south divide remains

The reverse of these data is in the southern half of the country, where all the autonomous communities will still register unemployment rates above 10% in 2026. Funcas’ forecasts indicate that Estremadura (13.7% unemployment) and Andalusia (13.4%) will be the communities with the highest level of unemployment next year. Followed at a distance by Canary Islands (11.7%), Castile-La Mancha (11.7%), Murcia (11.6%) and Valencian Community (11.2%).

However, it is also true that These territories have also recorded the largest drops in unemployment in the country. For example, unemployment in Extremadura will have fallen by almost 10 points in seven years if Funcas’ forecasts are met, while in Andalusia and the Canary Islands it will have fallen in seven.

These two speeds at which both halves of the country move in the workplace will have very important economic effects in the future. To the point that, in Funcas, they already talk about “a new economic cycle” different from the one that began after the pandemic recovery. While in the southern half of the country there is still enough labor for the economy to continue growing, in the northern half this growth model is beginning to be more difficult to sustain.

“In communities with less unemployment such as the Balearic Islands, those in the Ebro Valley, Galicia, Catalonia or Madrid, the increase in productivity and the ability to attract talent will be decisive,” explains Raymond Torres, director of Coyuntura at Funcas.

Madrid and the Balearic Islands will be the communities that grow the most

Beyond the labor market, Funcas growth forecasts suggest that Madrid will be the autonomy that expands its GDP the most next year. The capital will grow at a rate of 2.3%, closely followed by Balearics and Andalusia (2.1%, respectively) and Catalonia and Canary Islands (2% each). TAfter them, the two appear Castiles (1.8%), Rioja (1.8%), Valencian Community (1.8%) and Galicia (1.8%). Afterwards, it is found Asturias (1.7%), the Basque Country (1.6%), Navarre (1.6%), Estremadura (1.6%) and Aragon (1.6%) and close the list Cantabria (1.3%) and Murcia (1.3%).