Survey Reveals Economic Hardship for Many Spaniards Despite Growth

Spain's economy grew, but survey finds 27% of Spaniards struggle to live with dignity, 40% can't afford a vacation, highlighting the need for inclusive growth policies.

Trim Correspondents
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Survey Reveals Economic Hardship for Many Spaniards Despite Growth

Survey Reveals Economic Hardship for Many Spaniards Despite Growth

A recent survey in Spain has shed light on the economic struggles faced by a significant portion of the population, even as the country's economy continues to grow. The survey found that 27% of Spaniards say their income level does not allow them to live with dignity, while 40% cannot afford a one-week vacation per year.

Spain's economy grew by 2.5% in 2023, a decline from the 5.8% growth seen in 2022 but still outpacing many of its European peers. Inflation settled at 3.1% in December 2023, down from a high of 6.1% in February, and unemployment fell to 11.8% by the end of the year. The housing sector has remained resilient, with prices rising faster than in other European countries, although mortgage lending has declined due to higher interest rates.

Why this matters: The survey results highlight the ongoing economic challenges faced by many Spaniards, despite the country's overall economic growth. The findings emphasize the need for policies that promote inclusive growth and address income inequality.

However, the survey results paint a different picture for a significant portion of the population. The fact that over a quarter of Spaniards feel their income is insufficient to live with dignity and 40% cannot afford a basic annual vacation suggests that the benefits of economic growth are not being felt equally across society.

Access to housing also remains a major challenge in Spain, with the effort rate for housing close to 38% at the end of last year. While accessibility is expected to gradually improve as the Euribor stabilizes and households regain purchasing power, the current situation is putting pressure on many Spaniards.

The survey results come amid other economic indicators that point to potential headwinds for the Spanish economy in 2024. Bankruptcies have increased, and investment in the living sector dropped by 40% in the first quarter of the year compared to the same period in 2023. While Spain is still seen as an attractive destination for real estate investment, the rise in interest rates has shifted some activity towards the luxury segment and the Madrid market.

The survey findings emphasize the ongoing economic challenges faced by a significant portion of the Spanish population, despite the country's overall growth trajectory. As one survey respondent noted, "It's hard to feel optimistic when you're struggling to make ends meet, even as the economy is supposedly doing well." Policymakers will need to confront how to ensure that the benefits of economic growth are more evenly distributed and that all Spaniards have the opportunity to live with dignity.

Key Takeaways

  • 27% of Spaniards say income doesn't allow dignified living
  • 40% can't afford 1-week vacation annually despite 2.5% GDP growth
  • Inflation fell to 3.1% in Dec 2023, unemployment at 11.8%
  • Housing prices rising, but mortgage lending declined due to higher rates
  • Bankruptcies increased, living sector investment dropped 40% in Q1 2024