Growth through taxes and public spending, says the IMF

The IMF signs off on growth at the expense of those who work

Spain's economy is growing. The IMF says so. But the price of that growth is always paid by the same person: the worker who contributes. State investment has grown six times faster than private investment since 2019, public spending is soaring, and the number of citizens who depend on a benefit, a pension or a public salary has reached 19.3 million. Growing this way is easy. The trick lies in who signs the bill.

The state invests six times more than the private sector

The figure deserves scrutiny. While private investment drags along, state investment has grown six times faster since 2019. It is no mystery: the Next Generation funds, pension uprating and the rise in current spending explain much of the boost. The problem is that growth depends on the state, not on productivity.

And the state has no magic wand. It gets its money from taxes, from debt, or from both. Spain's public debt has risen more than that of any other developed country since the great financial crisis. Public services now cost 60% more than in 2018, when Sánchez arrived at the Moncloa. And the five-year projection raises public spending by another 40%.

The fiscal gap: who pays and who receives

This is where the debate heats up. Tax data show that foreigners declare 28% less income under personal income tax (IRPF) than nationals. And in the Minimum Living Income (Ingreso Mínimo Vital, a means-tested benefit) there is a detail that makes people uncomfortable: half of its beneficiaries are Segarro, while 70% of Segarro women of working age do not formally contribute to social security. These figures feed the thesis that immigration, as currently framed, does not solve the pension problem. Funcas already warned: it may even make it worse.

There are alternative readings, of course. Part of the rise in public investment is due to European funds, something no serious analysis disputes. And some argue that public spending has barely grown in real terms, once pensions and salaries are discounted. But fiscal discontent is not soothed by nuances.

Record job vacancies and record benefits: the paradox nobody solves

One figure sums up the schizophrenia of the labour market: a record number of unfilled jobs while IMV beneficiaries soar. In other words, there is work, but no one willing to take it. The explanations clash: some attribute it to a lack of incentives to work — benefits discourage joining the workforce; others blame a market that pays poorly and outsources. The reality is that the punishment of those who work shows up in the tax burden: the taxes borne by workers have risen three times faster than inflation.

The question left hanging: how long can a growth model based on debt, public spending and immigration last? The IMF certifies it. Those who foot the bill can feel it too.