Mapping Spain's economic decline: Asturias, the Canary Islands or Catalonia

The map of decline: Asturias, the Canary Islands or Catalonia

Which autonomous community is performing the worst? The seemingly simple question allows for as many answers as there are regional perspectives in Spain. Some point to the País Vasco (Basque Country), others to Navarra, some highlight Asturias, and a growing majority places Catalonia at the center of suspicion. The striking part is not the disagreement, but the fact that almost no one disputes the underlying diagnosis: there are regions that were once industrial engines or benchmarks of wealth that have been losing ground for decades without any government finding a way to reverse it.

The starting point is an analysis comparing the evolution of Spanish regions between 1955 and 2020. The most frequent conclusion is that Catalonia has seen a sharp drop in GDP per capita and suffers from one of the country's most aged population pyramids. Those defending this thesis argue it is not just a bad year, but a sustained trend that is turning the former economic engine into a territory that is increasingly uncompetitive.

Which regions are consistently cited?

Asturias is the most cited candidate by those looking at the long term. From being Spain's third industrial engine, it has become, according to the most common diagnosis, a region dependent on public funds, with a population stagnant since the eighties and a growing weight of early retirees and pensioners. Tourism, even its defenders admit, is the only thing that has prevented a total collapse in the coastal area.

The Canary Islands appear at the other end of the argument. They were not always poor: at the end of the 20th and beginning of the 21st century, they were in a relatively good position. Since then, their per capita income has continuously fallen, leaving them only above Andalusia and Extremadura. The parallel with the Balearic Islands is inevitable, although in the Balearic archipelago, the decline, if it exists, is less pronounced.

Andalusia has its own school of analysis. The most repeated thesis is that the region went from being central during the imperial era to becoming one of the poorest in Spain because industry moved north and capital concentrated in Catalonia and the País Vasco. The result, they claim, is entire provinces with weak productive fabrics, such as Huelva, Cádiz, or Jaén, where deindustrialization has left few alternatives.

The Basque economic agreement and VAT shifting

One of the more technical threads of the analysis concerns regional financing. The País Vasco and Navarra benefit from a concierto económico (a special tax agreement), which allows them to keep all the VAT collected in their territory. The rest of the communities depend on a common system where the tax is largely attributed to the registered office of the company issuing the invoice.

The most common example is a purchase at a gas station in Teruel: if the company's headquarters is in Madrid, a significant part of the VAT ends up in the capital. A similar thing happens with the purchase of a mobile phone in Almería if the company billing has its headquarters in Catalonia. The conclusion drawn by those defending this thesis is that the system turns some communities into fiscal rentiers and penalizes those that only contribute consumers.

Depopulation and aging as a backdrop

There is a broad consensus that the underlying problem is not just economic, but demographic. Castilla y León, Asturias, and Extremadura appear as the regions with the worst outlook due to their population pyramids. Asturias, in particular, is the only community that has not grown in population since the eighties, which aggravates any diagnosis of decline.

On the opposite side, some analyses remind us that Catalonia remains one of the four richest regions in Spain by GDP per capita, alongside Madrid, País Vasco, and Navarra. This apparent contradiction—high wealth and a sense of decline—is explained, according to this school of thought, by the loss of relative weight compared to Madrid and the inability to generate its own vision for the future.

---

Ultimately, the question of which community is the most declining contains a trap: each answer says more about the person asking it than about the territory mentioned. The data points to Asturias, the Canary Islands, and Catalonia as the strongest candidates. Opinions, as always, go in another direction.