Despite the exorbitant increase in prices and after suffering a deep slump in 2020, the consumption of Spanish households has gradually recovered until returning to the pre-pandemic level at the end of 2023.
It hasn't been easy. After the pandemic, there was a rise in inflation, caused by the resumption of activity and qualified at that time as temporary.
However, along came the war in Ukraine and the energy crisis, and the adjective temporary lost its meaning and prices climbed to unsuspected levels, with the ceiling exceeding 10% by mid-2022, for then moderate very slowly.
And, despite this, consumption recovered. How? The main strategies have been to look for offers when going shopping and to reduce savings and spending levels. In this, Spanish families behaved in a similar way to European ones.
On the other hand, where they diverge is in other behaviors, with Spanish women resorting much more to credit and looking for a second job or working more hours.
These two formulas, more credit and multi-employment, are the "ways to cushion the impact of the increase in prices on consumption, especially in the case of households with reduced liquidity cushions", states the article The reaction of the households facing the rise in prices in Spain in the EMU, published this Friday by the Bank of Spain.
It shows how Spanish families resorted to consumer credit 2.3 percentage points more than the eurozone average, which is in perfect agreement with the more dynamic evolution of consumer credit in Spain observed recently. In this way, the rise in household incomes, added to this dynamism in consumer credit, allowed families to continue their path of recovery in spending in 2023.
In terms of working more, the percentage of Spaniards who have had to do so to adapt to higher prices is also 1.2 percentage points higher than in the Eurozone. This assessment also agrees with Eurostat data, which show that the proportion of people in multiple jobs in Spain increased by 6.8% between September 2022 and September 2023, while in the euro zone the 'increase was only 1%.
And going deeper, the author of the Bank of Spain article, Carmen Martínez, points out that those who have had to increase their working hours the most, either with overtime or with a second job, are young people, women, people with a lower level of education and those who live in a rental system. It has been the formula they have had to resort to to maintain the level of consumption in the face of higher prices for a relatively long period of time.
Moreover, this is a trend that will continue. In the ECB survey on consumer expectations (CES) it is observed that the percentage of Spaniards who anticipate resorting to an increase in working hours in the next twelve months is eight points higher than those who have actually done so in the last twelve months A survey that focuses on the period between August and October 2023.
The way to adapt to the rise in prices also varies depending on the disposition of liquid assets of a certain amount. the
It is what the article qualifies as having or not having a liquidity cushion, which is defined as a level of sufficient resources to deal with unforeseen expenses for an amount equivalent to a monthly payment of your income.
The difference is clear. Those missing from the pillow are
