The economic growth has allowed the Andalusian Regional Government to approve once again record budgets in health and investment

With a growth forecast for the Andalusian economy of 2.3% and an unemployment rate that is expected to remain below 14% – a rate as low as before the Great Recession in 2008 – the governing council of Andalucía’s regional government (the Junta) has approved the draft for the 2025 budget law, expected to come into force on 1 January, once it has been endorsed by Parliament.

Half of the budget is allocated to health and social services. Budgetary support will come primarily from the Junta. Almost 77% of expenditure will be covered by self-financed funds, compared to 6.5% coming from earmarked transfers provided by the Spanish government to fund specific initiatives, as regional finance minister and spokesperson for the Andalusian government Carolina España has stated.

It is also the largest investment budget in Andalucía’s history, with a 10% year-on-year growth, well above the overall growth of the budget. The allocations for the self-employed have also been increased by 50%.

Optimistic forecast

The calculations are based on a positive forecast for the Andalusian Economy, estimating a growth rate of 2.3%, and creating 85,750 new jobs to reduce unemployment below 14.0%.

However, España warned that employment predictions might fall short, as they usually do, except during the pandemic. In 2023, for example, when the forecast was 68,300, the number of jobs that were finally created in Andalucía rose to 108,100. The forecast for the year was 53,400 jobs. However, in fact, there were 78.273 jobs created.

Although this is a historic budget for the region, España has stated that it is still not enough. “There is still a lack of 1.5 billion euros every year due to a system of regional funding that has neglected Andalucía since 2009,” she said.

Regional income

Regional minister said that despite the lack of funding, the increased revenue is what allows the budget grow. This is due to the fact that there are more taxpayers, companies, economic activity, and more and better jobs. It is the seventh consecutive year that the region has implemented an extensive tax-cut policy, which “helps improve the lives and pockets of families while promoting economic activity”.

España attributed the increase in tax collection to the boost of the economy and not to a greater tax burden, as Andalucía now has one million more taxpayers than when Juanma Moreno became president of the Junta.

According to España, it is a “serious, rigorous, prudent” budget, designed with the objective of containing debt and enhancing Andalucía’s financial reputation. She anticipates that next year the Junta will reach full financial autonomy, meaning that it will no longer need to rely on state loans to get resources.

While she highlighted Moreno’s budget capacity, España criticised PM Pedro Sánchez for systematically failing to present a draft budget in the central government. She said the Junta understands its responsibility to provide Andalusian Residents with “clear direction” and policies. She compared the regional to the central governments and said that the first faces “uncertainty, disorder, and chaos” brought on by the latter. The budget is proof.