For the first time in recent history, Spain can boast to the large euro economies that it is emerging better from a crisis. After almost five years of chained setbacks—first the pandemic, then inflation and Ukraine—the main institutional analysts believe that, once 2024 ends, the Spanish economy will have grown the most among the great European powers in these years. However, although Spain looks good in the current still photo, the medium and long-term outlook is not so encouraging.. Productivity – the foundation on which future growth is based – has been stagnant for a decade.
The latest macroeconomic projections published by organizations such as the OECD, the IMF, the Bank of Spain, the Airef and the European Commission place the expected growth for Spain this year between 1.5 and 1.7%. The Government is somewhat more optimistic and maintains its forecast at 2%. On the other hand, the latest estimates that have been known for the eurozone as a whole, published last Thursday by the European Commission, place the growth of the euro bloc at 0.6%. Only Spain, among the large European economies, would be able to increase its GDP above 1%. In 2025, it is expected that the eurozone will regain some rhythm, but also that Spain will continue to advance at greater speed.
If these forecasts materialize – which in economics is a lot to assume – Spain will have gone from being the European country that sank the most in 2019 to the large euro economy that will have grown the most. The factor that explains these two phenomena is, in part, the same. The coronavirus hit the Spanish economy so hard because contact services such as tourism and hospitality have a very important weight in the country's productive structure.. When they suffer — as happened with pandemic restrictions — the economy suffers more than in other countries where these services are not so key.
After the end of the pandemic, services have experienced a boom, from which Spain is especially benefiting. Furthermore, the crisis that emerged after the war in Ukraine has especially damaged the countries closest to the conflict and energy-intensive industry.. The geographical remoteness of the conflict and the lower weight of the industry in the Spanish GDP than in countries like Germany means that the impact is smaller.
The threat of low productivity
Employment and GDP grow, but all that glitters is not gold. The background image, the general plan of the Spanish economy, has important shadows. The longest, perhaps, is that of low productivity that has been stagnant for a decade. In the last quarter of 2023, real productivity per person in the Spanish economy was barely 12.3% higher than in 1995. Exactly the same percentage as in 2013.
Productivity is nothing other than the ability of an economy to take advantage of each worker or hour worked.. Consequently, this data reflects that each Spanish worker is capable of contributing the same added value to the economy as ten years ago.. Does this mean we have become lazier? Nothing is further from reality. The figure is nothing more than a reflection that the sectors that have the most weight in the Spanish economy continue to provide little added value.. This explains, for example, why the Spanish, working more hours than the Nordic countries or Germany, earn lower salaries.. In these economies, work is concentrated in sectors that generate more wealth per employee.
Economists say productivity is the growth of the future. If this is so, the future does not look particularly promising.. “We have an aging society, training problems and public investment is stagnant despite European funds. There is nothing that makes us optimistic,” says Manuel Hidalgo, professor of economics at Pablo Olavide University and researcher at Esade, in conversation with 20minutos.. Hidalgo points out that low salaries and precariousness are a consequence of this low productivity.
Low productivity is seen in GDP per capita, a measure that better reflects the economic well-being of a country than isolated growth data.. In 2022, the difference between per capita income in Spain and the eurozone remained the same as in 2001. In other countries the situation is even worse. Italy maintains the same difference with the eurozone as 30 years ago and France is worse than ever.
“GDP per capita has had a very disappointing performance in the last two decades. We cannot take advantage of our behavior in terms of income growth,” says Javier Ferri, Fedea researcher and professor at the University of Valencia in conversation with this newspaper.. “An economy cannot grow in the long term with stagnant productivity,” he concludes.
