You are currently viewing The annual cost of living for families is already 3,170 euros more expensive than before Covid

Living is more expensive than before the pandemic and salaries have not risen in the same proportion as prices. The annual cost of living for an average family is at least 3,170.04 euros more expensive than in 2019according to an estimate based on the INE survey of average household spending and average inflation for the years 2020, 2021 and 2022. They are no less than 264 euros per month, a very high amount for most Spaniards .

If the average inflation of the first four months of 2022 is taken as a reference, the basic shopping basket for families will be 464 euros more this year expensive than in 2019 if they maintain the same level of purchase, something that is not clear. And maintaining their home, paying for water, electricity, gas and other fuels will mean 1,022 euros more than before Covid-19 if they do not reduce consumption.

It can also be estimated that transport costs 624 euros more, Health has become more expensive 121.57 euros, education 52 euros and clothing and footwear another 116 euros per year.

Enjoy of free time has also risen in price. If the average inflation of 2019 is applied to spending on hotels and restaurants, the increase would be almost 319 euros, while in leisure and culture the cost increase would be 179 euros and in alcoholic beverages and tobacco, 24.29 euros.

All these data are an estimate subject to nuances to get an idea of ​​how households are losing purchasing power. In fact, the data on GDP growth in Spain that is also published by the INE indicate that household consumption is suffering as a result of price increases and economic uncertainty. However, in games like the fuels or olive oil These calculations seem to fall short in view of the data collected by the INE.

In 2020, the shock economy and the collapse of consumption due to confinement left a negative average annual CPI (-0.4%), while in 2021 average inflation closed at 3.08%, the highest figure in the previous decade. And in the first four months of the year the average data shows a Average CPI of 7.93%after the inflation data of 8.3% published by the INE this Friday (one tenth lower than the advanced data).

The estimate of the Bank of Spain is that the average inflation of 2022 is 7.5%, although it is trusted that in 2023 the rises in prices will moderate. However, when the CPI rises, the increase in product prices remains over time unless periods of negative inflation follow, something that is ruled out. Above all, taking into account that the mandate of the European Central Bank (ECB) is that the evolution of prices remains at 2%.

That objective of the central bank has other derivatives. For example, as is known, the rise in interest rates is already on the table to contain the rise in inflation in the eurozone, which in April stood at 7.5%, well above that mandate.

For the pocket of households, to the rise in the cost of living illustrated above is added the increase in the cost of mortgages at a variable rate due to the rise in the Euribor. As this newspaper published, it is estimated that households that are financing the purchase of their home in this way will have to allocate three more points of their income to pay the credit, up to 36.6% in 2023.

This increase in interest rates will also have a effect on the cost of financing the purchase of a home in the future, both in the case of variable mortgages and fixed-rate mortgages, which will be more expensive.

The productivity problem

The counterpart to this scenario is the productivity problem dragging the Spanish economy and the evolution of wages, which falls far short of compensating for inflation.

With no signs of resumption of collective bargaining (ANC) in which unions and employers should set the salary increase for 2022, there is great uncertainty about how the purchasing power of the Spanish will evolve. For now, the employers have been in favor of linking these increases to productivity to avoid an inflationary spiral.

Meanwhile, the salary increase by agreement was 1.89% in 2020 and 1.5% in 2021. For an average Spanish salary (which in 2019 was almost 24,400 euros) the salary increase would be around 834 euros per year. It is a figure with which the increase in prices is not compensated, since, in percentage terms, the estimated increase in the cost of living would be 11.4% and in wages 3.4% at this time. This is a difference of eight percentage points.


Disclaimer: If you need to update/edit/remove this news or article then please contact our support team Learn more


The News 24 is the place where you get news about the World. we cover almost every topic so that you don’t need to find other sites.