Rich and poor divide of Spanish regions revealed

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Jessica Jones - [email protected]
Rich and poor divide of Spanish regions revealed
The cost of living in Madrid is 43 percent more expensive than in Extremadura. Photo: Shutterstock

Madrid has the nation's highest cost of living while those in the Basque country earn the most per capita, a new study shows. Spain's poorest and cheapest region is Extremadura.


The northern Spanish region of the Basque country has Spain’s highest GDP per capita, at €30,051 ($32,600), almost double that of Spain’s poorest region, Extremadura, at €15,133, a new study has revealed.

The Basque Country has traditionally been one of Spain’s main industrial hubs, and today is home to thriving aeronautics and energy industries while much of Extremadura has been based around agriculture.

When purchasing power parity (PPP) is taken into consideration, the Basque Country remains the region with the highest incomes per capita (€27,895) while Andalusia becomes the region with the lowest (€18,058). 

The study did emphasize that the difference between the highest income regions and the lowest had gone down from 98 percent to 54 percent. 

The study, carried out by the Government of Catalonia and presented on Monday by Jaume García, professor at the Pompeu Fabra University in Barcelona, also looked at the cost of living in Spain’s autonomous communities and found a huge difference between the poorest and richest, according to Spanish daily El País. 

The cost of living in Madrid is 43 percent more expensive than in Extremadura, region in western Spain that comes in as the nation's poorest.

The study estimated the purchasing power parity (PPP) of different Spanish regions using data from 2012, allowing researchers to investigate levels of production, wellbeing, the cost of living and poverty in the Spanish economy while eliminating factors like price variation.

According to the study’s authors, there are three distinct groups of regions according to PPP. The first and richest is made up of Madrid, Catalonia, Navarra and the Basque Country, where the PPP is higher than Spain’s average.

The second group of regions has a PPP of around 10 percent lower than the Spanish average and includes Andalusia, Aragón, the Balearic Islands, Cantabria, Valencia, Galicia, Murcia and La Rioja.

The third group of regions – Asturias, the Canary Islands, Castille-La Mancha, Castilla y León and Extremadura – has a PPP of between 10 – 20 percent lower than Spain’s average. 

The objective of calculating the PPP was to encourage "better implementation of regional cohesion policies," so that the Spanish government can better allocate resources around different geographical areas of the country.

Within Europe, Spain continues to be relatively cheap. According to a new ranking released by cost of living index, Expatistan, the cost of living in Barcelona and Madrid is the 38th and 39th most expensive in Europe, placing Spain's two biggest cities way below other European capitals such as London (3), Paris (7) and Rome (28). 

READ: Spain's best and worst regions to live



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