Despite the current economic boom, new Eurostat data places Spaniards’ purchasing power as far behind the EU average as it was in 1999, with Spain now trailing behind countries such as Cyprus or Malta.
Newly published data from the European Statistics Office places Spain eight points below the EU’s average income level, the same rate as 25 years ago, proof that macroeconomics isn’t necessarily a reflection of the average wealth of a country’s population.
There has been no change to the Gross Domestic Product per capita in terms of purchasing power of the Spanish population over the past quarter of a century, which according to Eurostat stood at €27,770 in 2024.
Eurostat does estimate that Spain’s widely reported economic growth has helped Spaniards be wealthier in real terms, but not by much – only one point higher than in 2023 and still trailing at 92 percent of the EU average.
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By contrast, Cypriots and Maltese have become wealthier than Spaniards over the past 25 years, and the citizens of other nations such as the Czech Republic and Slovenia and Lithuania have caught up to Spaniards and are now on a similar wealth scale, whereas in 1999 they were far behind.
If it’s any consolation, the purchasing power of Italians, French, Finnish, Swedish and Austrians has also dropped since 1999, even though their wealth in real terms is still higher than that of Spaniards.
Overall, Spaniards are the 12th wealthiest people in the EU, with Luxembourgers, Danes and Belgians at the top of the table.
Spaniards’ average purchasing power has experienced ups and downs over the past 25 years.
It came close to the EU average in the final years of José María Aznar in the early 2000s, and even surpassed it in the first years of José Luis Rodríguez Zapatero.
However, this was somewhat of a mirage. Eurostat’s data reflects how the Spanish economy manages to grow faster than others when it’s smooth sailing, but when crises hit, it holds up much less well (cue the 2008 financial crisis and the Covid-19 pandemic).
The result is that Spain has returned to square one and Spaniards are no better off than they were 25 years ago.
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Former Bank of Spain head Pablo Hernández de Cos already warned in 2024 that “Spain has stopped converging with Europe in a sustained manner since the 2007 financial crisis, and the main reasons are low productivity and low employment rates.”
According to Hernández de Cos, other factors which have prevented Spain from being on a par with the EU include the small size of Spanish companies, increasing regulatory hurdles, the low level of worker training and innovation, a loss of efficiency in the country’s administrations and the ageing of Spain’s population.
Eastern European countries have fared better as have other large economies, such as France and Italy, which continue to outperform Spain even though they also have seen the purchasing power of their citizens fall in recent years.
READ ALSO: Is Spain’s ‘economic miracle’ making Spaniards richer?
