The Spanish economy has experienced more growth than the rest in recent years, but at the same time it is experiencing a negative exception that has profoundly unfavorable effects in the long term.
According to the latest estimates from the International Monetary Fund (IMF) released this week in Bangkok, Spain is the only large economy in the Eurozone that has lost productivity since 2018. Its calculation is that it will have lost one tenth in the period 2018-2027, which coincides with the period of Pedro Sánchez's government. Productivity is the key indicator to improve the per capita income of a country, raise salaries without losing competitiveness and, also essential, to ensure the viability of the pension system.
In contrast, Germany, despite its problems in this period, has improved its productivity by 1% and the Eurozone average has raised it by half a point. France and Italy also registered increases of 0.3% and 0.2% which, although modest, present a positive sign. The productivity jam is a general problem in the Old Continent, but it is striking that Spain is showing a decrease after having allocated more than 100 billion European funds since 2021, theoretically intended to transform the national economy and improve its productivity.
The IMF believes that productivity registered a drop of 1.4% in 2025, for example, when theoretically the bonanza and European funds would have led to expectations of a strong improvement. The positive growth this year and next does not prevent the average since 2018, according to the IMF, from being negative.
Economists consider that to measure productivity well, long periods must be taken. Between 2008 and 2017, with most of the years in crisis, there was an increase in productivity of 3.2%, but that did not solve the problems of the national economy either.
Where Spain does surpass other large euro economies in the IMF forecasts is in the rise in unit labor costs. Since 2018 they have increased by 3.1%, above the 3% average for the Eurozone and Germany and doubling the pace of France and Italy.
Labor costs do not measure only salaries, but the general cost of labor in companies, and economic research services advise against them growing more than productivity. The Bank of Spain reiterates this on a recurring basis, as does the European Commission. The International Labor Organization also includes this principle: «Wage growth that is systematically higher than the growth of labor productivity is unsustainable. The opposite is also true. The objective is for salaries and productivity to grow at the same rate.
US criticism
On the other hand, the US State Department has published its annual report on the investment climate in Spain and warns of obstacles, lack of market unity and cites the Government's resistance to paying awards for renewable energies. "It has consistently resisted compliance," he says. Although he continues to consider the fourth largest economy in the euro as an attractive country for investment due to its high growth in recent years, he summarizes its problems as follows: "Investors consider that the regulatory environment, the relatively high tax pressure and the increase in costs (for example, labor and energy) are aspects that must be improved."
Furthermore, "although some progress has been made, bureaucratic procedures remain complex and time-consuming, which can delay business activity. Differences between regional regulations and the lack of a unified national market in some sectors can also limit business growth."
