Spain | Perception and reality: The puzzle of economic recovery

Summary

Spain has staged one of the most dynamic macroeconomic recoveries in Europe after the pandemic. Employment and GDP have far exceeded the levels observed in 2019. However, the mood of households does not seem to have followed the same path.

Key points

• Key points:
• According to the Eurobarometer (up to the third quarter of 2024), the perception of expectations related to the economic situation in Spain was significantly worse than in 2019.
• The answer to this divergence lies not so much in the large aggregates, which show an expanding economy, but in the indicators that determine how citizens' daily lives have evolved.
• In particular, disposable income per household in real terms – that is, what is actually left in the pocket after taxes and adjusted for inflation – has barely advanced. While employment has grown, the increase in real wages per worker has been modest.
• In addition, not all households have experienced the recovery in the same way. Public policies have effectively protected pensioners and the lowest incomes. But other groups, especially middle- and high-income households headed by young people or middle-aged people, have not received the same support.
• Another element that has negatively affected perceptions is the housing market. Rising rental prices have made it difficult for young people to emancipate themselves and limited the ability of older households, property owners, to make a secure return on their assets.

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