Spanish settlements higher than inflation

A combination of lower levels of inflation and higher settlements has meant that recently negotiated pay increases in Spain are now running above inflation, producing real terms pay growth.

The latest available figures – for July – show that inflation is now at 2.3%, after reaching a peak of 10.8% in July 2022. The annual increase in negotiated pay is 3.26%, but this includes long-term agreements signed before 2023, but with staged increases coming into effect during the year. If only agreements signed in 2023 are considered, the average increase is 4.28%. This is in line with the pay recommendation of a 4.0% increase in 2023, agreed between unions and employers in May.