I’m not a fan of Spanish fiscal policy. The burden of government spending has significantly increased over the past two decades and debt levels have grown enormously.
A major problem is that Spain has a leftist government that seems determined to move faster and farther in the wrong direction.
Interestingly, the Prime Minister thinks his country is a role model. Here’s some of what Pedro Sánchez wrote in a column for the New York Times.
…Our economy is flourishing. …For three years running, we have had the fastest-growing economy among Europe’s largest countries. We have created nearly one in every three new jobs across the European Union, and our unemployment rate has fallen below 10 percent for the first time in nearly two decades. Our workers’ purchasing power has also grown, and poverty and inequality levels have dropped to their lowest since 2008.
The focus of his column is to argue for more migration, including amnesty for illegal immigrants. But I don’t want to dwell on that debate.
I’m much more interested in dealing with his assertion that his economic policies have produced good results. Is he right, for instance, to claim that Spain is “the fastest-growing economy among Europe’s largest countries?
My immediate reaction is to shrug my shoulders and say “so what?” After all, France, Germany, and the United Kingdom are all being suffocated by economically suicidal policy. And Italy isn’t doing much better.
Growing faster than those nations would be like me bragging I could beat a 5-year old in a game of basketball.
Nonetheless, I decided to investigate by going to the IMF’s database and comparing inflation-adjusted per-capita GDP for Spain and Poland. Poland presumably qualifies as a large country and it also is famous or infamous (depending on your perspective) for not being welcoming to migrants.
So this comparison should tell us if Prime Minister Sánchez is accurate. You probably won’t be surprised to learn that his claims of being Europe’s star performer are wildly wrong.
Both nations suffered during the pandemic, as one might suspect.
But one trend is clear when looking at at the period of Sánchez’s rule, starting in 2018. Spain’s inflation-adjusted per-capita GDP has grown by an average of less than 1 percent per year. Poland’s per-capita GDP, by contrast, has grown about four times faster.
Since Poland started at a lower level of prosperity, some “convergence” is normal and expected. But Spain’s growth has been so anemic that the gap between the two nations vanished in a very short period of time.
