Full terraces at 9am: the mirage of Spain's consumption boom
Spain's terraces are packed, but the real economy is struggling: credit, inheritances and one-off tourism are papering over consumption that is sinking in supermarkets.
English · Original discussion in Spanish · Published
Full terraces at 9 in the morning: the consumption mirage hiding the real ruin
Terraces across half of Spain are packed to bursting. At nine in the morning there are already hour-long queues for a table, waiters are run off their feet every shift, and tourists who were headed for the Middle East have ended up on the coast. The picture is one of euphoria, but under the awning something else is brewing: the real economy is not in the vermouth, it is in the supermarket trolleys, getting smaller and holding fewer products.
Credit and inheritance are paying for the round of drinks
Behind every crowded terrace there is an uncomfortable trio. Consumer credit —cards, quick loans— is financing a good part of those drinks. Grandparents' inheritances are being liquidated in 3-euro coffees. And tourist rentals allow some people to live it up for two months at the cost of tightening their belts for ten. The photo is real, but it is a mirage of prosperity built on a base of debt.
More mass tourism, lower GDP per capita
The tourism upturn, fuelled by the diversion from the Middle East, is temporary. They come, they spend, they leave. The real mass tourism is still the tattooed Brits and the Nordic Airbnb crowd, which barely moves GDP per capita in any meaningful way. Meanwhile, the decline can be felt in butchers' shops and greengrocers: people buy just enough for the day, they don't stock up, pantries are no longer filled the way they were in the 2000s.
The paradox of terrace-filling is that it measures exactly the opposite of what it seems. Nobody knows whether the terraces will still be full next summer, but the supermarket doesn't lie.
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Terraces across half of Spain are packed to bursting. At nine in the morning there are already hour-long queues for a table, waiters are run off their feet every shift, and tourists who were headed for the Middle East have ended up on the coast. The picture is one of euphoria, but under the awning something else is brewing: the real economy is not in the vermouth, it is in the supermarket trolleys, getting smaller and holding fewer products.
Credit and inheritance are paying for the round of drinks
Behind every crowded terrace there is an uncomfortable trio. Consumer credit —cards, quick loans— is financing a good part of those drinks. Grandparents' inheritances are being liquidated in 3-euro coffees. And tourist rentals allow some people to live it up for two months at the cost of tightening their belts for ten. The photo is real, but it is a mirage of prosperity built on a base of debt.
More mass tourism, lower GDP per capita
The tourism upturn, fuelled by the diversion from the Middle East, is temporary. They come, they spend, they leave. The real mass tourism is still the tattooed Brits and the Nordic Airbnb crowd, which barely moves GDP per capita in any meaningful way. Meanwhile, the decline can be felt in butchers' shops and greengrocers: people buy just enough for the day, they don't stock up, pantries are no longer filled the way they were in the 2000s.
The paradox of terrace-filling is that it measures exactly the opposite of what it seems. Nobody knows whether the terraces will still be full next summer, but the supermarket doesn't lie.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (37 replies).
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