Spain spends like the rich and saves like the poor

Full terraces and tight budgets: the spending paradox in Spain

The day fuel reached its highest recorded price in Spain, the southern outskirts of Madrid were choked with cars. Terraces are packed, weekend restaurant reservations sell out, and queues form for the latest €2,000 phone. Yet, at the same time, a segment of the working class argues that they cannot even afford a small bag of chips. This is not an isolated sentiment; it is the country's economic portrait, and no one seems to be able to reconcile it.

Fuel prices at record highs and roads packed

The price of gasoline has never been so high, yet the roads are not emptying. This contrast—record costs versus record traffic—summarizes the general confusion. In Seville, a group of 70 foreign tourists dined at a seafood restaurant and the only solid thing they consumed was olives. In Madrid, the queues for the latest mobile model repeat with every launch. Simultaneously, securing a table on a Saturday night has become an almost impossible mission in many cities.

Why is more being spent when there is less?

The most repeated explanation points to a shift in where the money is going. If buying housing is unattainable—an apartment can cost one million euros—and establishing a stable life project is beyond budget, that money is diverted to current consumption: dinners, travel, clothing, technology. A salary of €3,500 per month is not enough for a house down payment, but it is enough for a high-end phone and a few days of travel with the right equipment.

This gives rise to a new figure: the poor with expensive tastes. Small luxuries accumulate because basic necessities cannot be afforded. This is partly sustained by debt: it is estimated that around €30 billion flows into financing in Spain every month. The savings attributed to households, in this context, are less solid than they appear.

Officials, retirees, and high earners: who actually has the money

There is a segment that does not tighten its belt: retirees, civil servants, and those living off real estate rents, all at historical peaks. Much of the visible spending comes from this group, who have plenty of leisure time to spend it. Private sector salaries have improved, but not at the same pace. The result is a picture where pools of money coexist with people sleeping on Gran Vía.

The middle class torn in two

The most common diagnosis is structural: the middle class, which leveled up the country for decades, is dissolving. When only two camps remain—those who can't make ends meet and those who don't look at the price—the rules change. Some read this as a return to almost caste-like logic; others recall that Spain was always poor and that now, at least, there is consumption and spending capacity.

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With these dynamics, spending should have plummeted. It hasn't. The account that doesn't balance is simple to state but difficult to resolve: where does the money come from for the terraces when salaries say something else?