Fitch: curbing immigration slows GDP, but what about per capita?

Fitch warns: curbing immigration slows GDP, but per capita income is another story

Is immigration an indispensable engine of Spain's economic growth, or a mirage that flatters the headline figures? The Fitch agency, through its CEO Ian Linnell, warns that even a minimal curb on immigration would slow GDP growth in Spain. Yet the debate centres on whether that aggregate growth translates into greater well-being per resident.

Supporters of migration controls point out that GDP per capita could rise if the population denominator shrinks, even if the numerator falls too. They cite Poland, which grew at the same pace as Spain last year despite losing population. Meanwhile, those in favour of maintaining the migration flow rely on Banco de España (Spain's central bank) data: the foreign population contributed between 0.4 and 0.7 points to annual GDP per capita growth between 2022 and 2024, out of a total of 2.9%. That said, the contribution to hourly productivity was slightly negative.

The underlying question is whether immigration meets structural needs of the labour market or, as some argue, worsens problems such as housing and the strain on public services. While Fitch focuses on aggregate GDP — the indicator Wall Street watches — the average citizen looks at their real wage and the price of rents. Consensus is nowhere to be found. Irony of ironies: the same agency warning about the migration brake is the one that rates Spanish sovereign debt — debt that grows with every new resident who consumes public services without having contributed a lifetime of social security payments.