Spain | Two visions of the economic recovery

Since the beginning of the war in Ukraine, Spain has grown more than the EU, but the data offers an alternate view when, instead of comparing the aggregate performance of activity and employment, we focus on per capita growth.

Key points

• Key points:
• According to the latest available data from BBVA Research, the Spanish economy will grow by 2.5% this year, compared to the 0.7% expected for the eurozone. Cumulatively, since the end of 2019, Spain's GDP is up 4.7%, and eurozone GDP is up 3.9%. In the labor market, the differences are even greater.
• In this same four-and-a-half-year period during which GDP grew by 4.7% cumulatively, the population grew by 3%, bringing per capita GDP growth down to 1.7%. The GDP per employee according to the Labor Force Survey is 1.2% below its pre-pandemic level, and real wages have decreased.
• While employment is at record levels, so is the labor force, so the unemployment rate is declining more slowly. It is still at 11.3%, more than 3 points above its 2007 low.
• After discounting the price increase, per capita private consumption is 2.3% below its pre-COVID level. Moreover, household consumption does not include investment in housing, the affordability of which has also worsened compared to 2019 by about 3 percentage points of the average household's wage income.
• We should celebrate Spain's standout performance compared to other EU countries, but our economy still needs to grow more in terms of employment, productivity and per capita income and consumption in order to improve public perception and reduce the gap in living standards with Central and Northern European countries.

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