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# [RÉUNION] Economic Review 2025-2026: A Fragile Rebound at +1.1%, Unemployment Back at 18% and 1,100 Companies at Risk
- URL: https://businessoi.media/en/la-reunion-bilan-2025-2026-rebond-a-1-1-mais-le-chomage-remonte-a-18-et-1-100-entreprises-fragilisees-en/
- Published: 2026-07-25T13:42:26.000Z
- Updated: 2026-07-25T13:42:26.000Z
- Description: Réunion Island recorded +1.1% growth in 2025, driven by public spending and household consumption. But unemployment climbed back to 18% in Q1 2026, with over 1,100 companies still in judicial reorganization. The recovery remains fragile.
- Author: Emmanuel TAOCHY
- Tags: La Réunion, Économie, emploi, Clôture, #en

**Réunion Island recorded economic growth of +1.1% in 2025 — a rebound after the near-stagnation of 2024 (+0.5%). But the first months of 2026 paint a more nuanced picture: the unemployment rate has climbed back to 18% in Q1, and more than 1,100 companies remain under judicial reorganization proceedings. A review of an island economy still in recovery mode.**

## A rebound driven by public spending and consumption

According to INSEE and CEROM, the 2025 recovery rested on two pillars: public expenditure (+2.5%), partly driven by post-cyclone reconstruction, and household consumption (+1.2%). Inflation fell sharply to 1.4% in 2025 (from 2.8% in 2024), gradually restoring purchasing power. Investment also rebounded by 1.6% after a marked decline the previous year.

## The labour market tightens again in 2026

This rebound masks a more worrying reality. The unemployment rate reached 18% in Q1 2026 — up **2 percentage points** year-on-year — even as salaried employment held steady at 294,700 positions. This paradox is explained by previously discouraged workers re-entering the labour market: the active population is growing faster than job creation.

## 1,100 companies in difficulty, construction hardest hit

The business fabric still bears the scars of successive crises. More than **1,100 companies** are under judicial reorganization in Réunion — a 30% increase compared to 2023\. The construction and public works sector is particularly hard hit: over 600 cases before commercial courts and around **2,000 jobs lost** in the sector. Industry federations describe the situation as a "sectoral recession" and are calling for the Lodeom support scheme to be maintained.

## Why it matters

Réunion Island illustrates the fragility of island economies facing external shocks. While the macroeconomic indicators for 2025 appear encouraging, the microeconomic signals for 2026 tell a different story: a labour market under renewed pressure, struggling businesses, and a construction sector in deep crisis. The relaunch of the New Coastal Road (NRL), included in the 2026 regional budget, offers concrete hope — but Réunion's economy will need more than one major project to return to inclusive, sustainable growth.

*Sources: INSEE / CEROM, Réunion economic review 2025; La1ère Réunion, judicial reorganization report, 2026.*