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Spanish economic productivity has dropped 10.5% since 1995, but has increased 4.5% in the European Union

Since 1995, Spain has only been able to reduce the gap in GDP per capita with the euro area by 2.7 percentage points. Currently, Spain’s level is 19.2% below that of the Economic and Monetary Union (EMU). This evolution has been influenced by low productivity rates in the Spanish economy. Spain’s total factor productivity (TFP) in 2017 was 10.5% below that of 1995, while the EMU and the European Union increased their TFP by 1.4% and 4.5%, respectively, in that period. The gap in labor productivity has also widened, with Spain currently at 18.7% below that of the EMU — twice the difference of 1995. Lower investment in R&D, human capital and public capital has also contributed to Spain’s lower productivity and income per capita.