Spain, the OECD country where real incomes have fallen the most since Covid
Real incomes have remained sluggish in Spain since the pandemic, and new figures from the Organisation for Economic Co-operation and Development (OECD) reveal just how much they've fallen.
Out of the 38 OECD member countries, Spain is the one where the 'real income' of families has fallen the most since the Covid-19 pandemic, according to OECD figures released on Wednesday, February 8th.
Real income per inhabitant is an economic indicator that gauges the actual disposable income per inhabitant by calculating income and any state benefits such as unemployment aid, and deducting taxes and other social contributions.
READ ALSO: Tourism in Spain bounces back to near pre-pandemic levels
Using this metric, real income in Spain decreased by 7.85 percent between the fourth quarter of 2019 and the third quarter of 2022. This lies in stark contrast to the overall global progress of 1.9 percent growth among other OECD countries.
Declining nations
Spain was not alone, however. Real incomes in Portugal fell by 4.14 percent in the same period, and also in the United Kingdom (-3.94 percent), Finland (-1.80 percent), the Czech Republic (-1.68 percent) and Denmark (-1.30 percent).
"Real per capita family income exceeded pre-COVID-19 pandemic levels in the third quarter of 2022 in all OECD countries for which data are available, except the Czech Republic, Denmark, Finland, Portugal, Spain and the United Kingdom," the OECD said.
Growing nations
At the other end of the spectrum, real income rose in Poland by 7.16 percent, and also in Slovenia (6.53 percent), Australia (4.55 percent), Hungary (4.26 percent) and Canada (4.09 percent).
In the cases of Spain and Portugal, the OECD suggested that the declines could be explained, in part at least, by the "slow recovery" of gross operating surpluses and mixed household income since the pandemic. "This type of income is usually associated with self-employment and, in most countries, it contributes about a fifth of disposable household income," according to OECD.
In addition to Spain's falling real income, it is also one of the few OECD countries that has failed to recover its pre-pandemic production levels. Between the last quarter of 2019 and the third quarter of 2022, GDP fell by 1.94 percent, whereas there has been a combined growth of 2.73 percent in the OECD members as a whole.
In terms of real income, the direction of travel doesn't seem overly promising for Spanish families. In the third quarter of 2022, OECD countries recorded an increase of 0.2 percent, the first since the first quarter of 2021, but in Spain it fell by 2.76 percent, rounding off four consecutive quarters of decline.
Economic forecasts
Forecasts for the Spanish economy have been somewhat of a mixed bag in recent months, with seemingly encouraging and worrying signs occurring simultaneously. It really does depend on which metric you judge the situation by. But, despite Spain's real incomes remaining sluggish since the pandemic there are some shoots of hope in the Spanish economy.
READ ALSO: Will Spanish economy really grow faster than all Euro countries in years ahead
In early February the IMF published its first global economic forecasts of the year, and according to projections Spain will be the European economy that will grow the most in 2023 and 2024 (among large economies), a group that includes Germany, France and Italy.
However, this should be tempered somewhat by the realisation that these projections, though positive overall, are actually slight downgrades to Spain’s previous GDP forecasts. In fact, the Spanish economy was the only major Eurozone economy to have its forecasts downgraded, despite still leading the pack.
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Out of the 38 OECD member countries, Spain is the one where the 'real income' of families has fallen the most since the Covid-19 pandemic, according to OECD figures released on Wednesday, February 8th.
Real income per inhabitant is an economic indicator that gauges the actual disposable income per inhabitant by calculating income and any state benefits such as unemployment aid, and deducting taxes and other social contributions.
READ ALSO: Tourism in Spain bounces back to near pre-pandemic levels
Using this metric, real income in Spain decreased by 7.85 percent between the fourth quarter of 2019 and the third quarter of 2022. This lies in stark contrast to the overall global progress of 1.9 percent growth among other OECD countries.
Declining nations
Spain was not alone, however. Real incomes in Portugal fell by 4.14 percent in the same period, and also in the United Kingdom (-3.94 percent), Finland (-1.80 percent), the Czech Republic (-1.68 percent) and Denmark (-1.30 percent).
"Real per capita family income exceeded pre-COVID-19 pandemic levels in the third quarter of 2022 in all OECD countries for which data are available, except the Czech Republic, Denmark, Finland, Portugal, Spain and the United Kingdom," the OECD said.
Growing nations
At the other end of the spectrum, real income rose in Poland by 7.16 percent, and also in Slovenia (6.53 percent), Australia (4.55 percent), Hungary (4.26 percent) and Canada (4.09 percent).
In the cases of Spain and Portugal, the OECD suggested that the declines could be explained, in part at least, by the "slow recovery" of gross operating surpluses and mixed household income since the pandemic. "This type of income is usually associated with self-employment and, in most countries, it contributes about a fifth of disposable household income," according to OECD.
In addition to Spain's falling real income, it is also one of the few OECD countries that has failed to recover its pre-pandemic production levels. Between the last quarter of 2019 and the third quarter of 2022, GDP fell by 1.94 percent, whereas there has been a combined growth of 2.73 percent in the OECD members as a whole.
In terms of real income, the direction of travel doesn't seem overly promising for Spanish families. In the third quarter of 2022, OECD countries recorded an increase of 0.2 percent, the first since the first quarter of 2021, but in Spain it fell by 2.76 percent, rounding off four consecutive quarters of decline.
Economic forecasts
Forecasts for the Spanish economy have been somewhat of a mixed bag in recent months, with seemingly encouraging and worrying signs occurring simultaneously. It really does depend on which metric you judge the situation by. But, despite Spain's real incomes remaining sluggish since the pandemic there are some shoots of hope in the Spanish economy.
READ ALSO: Will Spanish economy really grow faster than all Euro countries in years ahead
In early February the IMF published its first global economic forecasts of the year, and according to projections Spain will be the European economy that will grow the most in 2023 and 2024 (among large economies), a group that includes Germany, France and Italy.
However, this should be tempered somewhat by the realisation that these projections, though positive overall, are actually slight downgrades to Spain’s previous GDP forecasts. In fact, the Spanish economy was the only major Eurozone economy to have its forecasts downgraded, despite still leading the pack.
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