Spain’s purchasing power has been the subject of a worrying trend in recent decades, according to new data from the Organization for Economic Cooperation and Development (OECD). In a group of 32 member countries, Spain is one of the four that has experienced a decline in purchasing power since 2000, with a decrease of 0.4%. Although this number may seem small compared to other countries, it is an important indicator of the health of the country’s economy.
In 2000, the average Spanish salary was 18,526 euros, and in 2022, this number increased to 29,113 euros. However, if this increase is adjusted for inflation and price increases during that period, the Spanish lost around 116 euros in terms of purchasing power. Although Spain is the country of the four affected that suffered the smallest decline, the fact that it fell at a time when the OECD average growth of 17.4% is a cause for concern.
Compared to other European countries, Spain lags behind in terms of purchasing power. Neighbors such as France, Germany and Portugal saw significant increases of 20.8%, 17.8% and 3.1%, respectively. This raises questions about the economic and labor policies implemented in Spain and their effectiveness in improving the economic well-being of the population.
Unemployment is another critical aspect affecting the purchasing power of Spanish citizens. Spain maintains an alarming unemployment rate of 12.87%, the highest in the OECD and one of the highest in Europe. This situation directly affects people’s ability to maintain their standard of living and contributes to a decline in purchasing power.
In addition, pension spending in Spain is also increasing, and inflation is expected to increase it by another €15 billion throughout 2024 and 2025. In 2023, pension spending has already increased by 11.4%. This represents a significant challenge to the financial sustainability of the pension system and may have a negative impact on the wider economy.
Finally, inflation, especially in food prices, adds another layer of concern. Although there has been a moderation in recent months, the headline inflation rate stood at 2.6%, while core inflation, which excludes volatile items such as food and energy, remained at a high of 6.1% . This raises the possibility that prices will continue to rise slowly in Spain, which could further erode the purchasing power of the population.
In summary, the fall in purchasing power in Spain since 2000 is an issue that requires urgent attention from economic and government authorities. With high unemployment rates, rising pension costs and continued inflation, it is important to implement policies that stimulate economic growth and improve the living conditions of Spanish citizens.