The economy of the Canary Islands is expected to conclude the year with a growth rate of 3% but is anticipated to experience a slight deceleration in 2025, reducing to a 2% growth.
SANTA CRUZ DE TENERIFE, 25th October (EUROPA PRESS) –
This Friday, CEOE-Tenerife labelled the 2025 regional budgets as “static,” cautioning against the “worrisome” trajectory of investments and criticising the ‘forest cent’ initiative that the councils of Tenerife and Gran Canaria are set to implement.
The president, Pedro Alfonso, remarked during the presentation of the employers’ status report that the Canarian Government is “sneaking in an environmental tax” albeit “romantically,” describing it as a “new tax” that paves the way for further environmental taxes in the future. “We are not inclined to support this; we require solutions,” he asserted.
He acknowledged that while the budget has grown by €370 million, “the entirety is allocated” to uphold the welfare state, indicating that “there are insufficient funds for infrastructure investments, roads, or, obviously, housing.”
In this context, he regarded the incentives for enhancing the real estate sector as “positive” but clarified that they will not be “effective” unless 100,000 new dwellings are activated across the islands.
Afonso also cautioned that “the Canary Islands cannot emerge from this crisis independently,” providing the Basque Country as an example; it has a similar population yet boasts the same number of employees and half the unemployment rate due to its “higher added value” economic activities that extract “maximum returns” from state financing.
In this regard, he mentioned that the Canary Islands “have been supporting” the “deficit” of regional financing with their own resources, which are diverted towards “plugging gaps” in the context of an increasing population and expanding service portfolios.
He further noted that absenteeism in the islands is around 9%, and the shadow economy constitutes 17.9% of the GDP, amounting to approximately €10.74 billion, according to a report from the University of Murcia. Afonso does not attribute this to unpaid overtime or contract conversions but perceives it as a “social issue” with a “high percentage of crime and challenges of prostitution and drugs, which also fall under this category and for which there are no solutions beyond economic considerations.”
He also expressed disappointment with the 16% drop in productivity over the last decade, emphasising that the Canary Islands are becoming “poorer,” a situation he finds “frustrating” due to the increased risks and investments made by entrepreneurs, with efforts being “diluted” by fiscal pressure and regulatory burdens.
As a result, he has urged the Canarian Government to honour its electoral commitment to reduce the general rate of the IGIC.
The president of the Tenerife business community stressed that the central government “must cease employing electoral tactics and recognise that without the General Budget of the Canary Islands, it will not overcome poverty,” as the archipelago cannot solely depend on budgetary collections without introducing new infrastructure initiatives or updates.
“STATE’S ‘PASSIVITY’ IN TOURIST PROTESTS”
Additionally, he remarked that the business sector has not “appreciated at all” the “passivity” of the State during the tourist protests that took place last Sunday across various parts of the archipelago, questioning “how such behaviour can be tolerated” that allowed protesters to breach approved routes and “harass families” of tourists on a beach in southern Tenerife.
“This is not the appropriate attitude,” he clarified, while asserting that “the Canary Islands are not defined by this minority,” rather a traditional destination that “cater to tourists and thrives on tourism,” and this economic activity must be complemented by strengthening other sectors.
Overall, despite the employers’ association identifying certain indicators of economic deceleration, it forecasts that the Canary Islands will conclude this year with a 3% increase in GDP, projected to decrease to 2%, albeit tentatively, in the coming year.
