Those touting the “recovery” in Spain need to step back and ponder this headline story translated from Libre Mercado: household income falls 10% and back to 2005 levels.
Interim results from the Living Conditions Survey released Wednesday by the National Statistics Institute (INE) show that the annual average net income per household in Spain stood at 23,123 euros in 2012, a decrease of 3.5% compared the previous year. Meanwhile, the average per capita income reached 9,098 euros, 2.4% lower than in the previous year.
The average income of Spanish households has fallen by 9.5% during the crisis, which translates to about 2,400 euros less per year between 2008 and 2012, as shown in the following table.
According to the survey, 16.9% of Spanish households had “great difficulty” making ends meet in 2013, the highest percentage recorded throughout the period of crisis. In 2012, households that expressed much difficulty to reach end of the month was 13.5%, ie 3.4 points lower than those found in this situation this year. In 2007, households that arrived at the end month with great difficulty were 10.7%, which rose in 2008 (12.8%) and 2009 (14.8%) and decreased in 2010 (14.2%) and 2011 (10.6%) to return to pick up the record level reached 16.9% this year.
The statistics also revealed that 40.9% of households are not able to handle unforeseen expenses, a proportion that has been declining compared to 2012, when households in this situation reached 41.4%. In addition, the INE notes that the number of households that could not go on holiday at least one week a year this year stood at 45.8%, also a record for the crisis, and far greater to the 37% recorded in 2007.
Spanish Recovery? With declining income? At record levels?
Mike “Mish” Shedlock