Inflation, Euribor and housing: the triple squeeze on Spain's average earner

GDP up, wallets down: the triple economic storm that won't let up

Spain's GDP is growing at 2.6% according to the Government, while Funcas puts it at 2.4%. Figures most European countries would sign up for. But the average citizen doesn't feel it. The OECD warns that the purchasing power of wages has lost two points since 2021. Real wages rose 2% over the past year, but remain 2% below their pre-pandemic level. The SMI (Spain's statutory minimum wage) has climbed to €1,221 a month over 14 payments (€1,424 over 12), but other salaries are not keeping pace.

The divorce between macro and microeconomics

Aggregate growth is not reaching people's pockets. Productivity is stagnant and inflationary pressures point to more strain ahead. While the Euribor keeps climbing — the thread doesn't give the exact figure, but the trend is clear — housing costs are soaring. Those with variable-rate mortgages are feeling the pain; those on fixed rates, a lucky few, are spared. But most people don't have wages indexed to the CPI.

Two visions of the future

Some argue the system cannot sustain this imbalance and that the correction will be abrupt: when the subsidy money runs out, all hell will break loose. Others believe nothing will happen beyond widespread hardship, a silent erosion without a collapse. Both camps agree that the present is unsustainable for the average Spaniard.

The triple front is set: inflation that won't ease, Euribor that bites and housing that's slipping out of reach. What nobody can quite explain is why, with these numbers, the economy keeps chugging along. Or maybe there is an answer: because GDP and the shopping basket no longer speak to each other.