Romanian and Ukrainian exodus undermines Spain's GDP story

Romanians and Ukrainians leave while GDP smiles

The Spanish economy is growing 2.7% year-on-year, three times the eurozone rate. Employment is hitting record highs and the international press is full of praise. Yet the departure of Romanian and Ukrainian citizens is intensifying, with an uncomfortable twist: the same trend is visible in the Chinese community, with shops closing in neighbourhoods and towns across half the country.

The macro mirage versus the wallet

The problem is that GDP cannot be eaten and does not pay mortgages. Real wages have stagnated: they have grown just 2.7% over the past 30 years, according to comparable series. Meanwhile, housing prices have risen far above salaries, and per capita income has yet to take off. The gap between the macro headline and everyday experience has become so vast that those with geographic mobility are using it.

There is one figure that sums up the decline: those leaving are not the worst off, but those who can still choose. The exodus of workers from Eastern Europe, and of Asian shopkeepers too, is not a demographic flow problem but a symptom that the real economy no longer sustains the middle classes.

How long can the story hold up?

A growth model based on low value-added sectors and tourism has an expiry date. If those leaving are precisely the ones with initiative, the drain will show up in entrepreneurship before it shows up in employment statistics. The day the international press discovers that record employment coexists with the biggest loss of purchasing power of the past decade, the reckoning will come fast.

For now, the question is how many will hold on. Recent history suggests that labour goes where wages lead, and Spain, with soaring housing prices and frozen salaries, is not on that list.