AIReF warns that rising labor costs and stagnant productivity threaten Spain's growth

The Independent Authority for Fiscal Responsibility (AIReF) has issued an alert about the continuous climb in Spain's unit labor costs, which have risen for 22 straight quarters and jumped 4% between April and June, fueled by wage hikes and higher social-security payments. Meanwhile, total factor productivity remains unchanged, offering no offset to the cost surge. AIReF stresses that investment in the country has not generated sufficient added value to counterbalance these expenses, and that the trend is likely to keep labor costs above 3% in the coming years.

The warning comes as most new jobs are concentrated in low-productivity sectors such as tourism, hospitality, manufacturing and construction, which together employ about 60% of the workforce, while high-value professions account for roughly 20%. The authority also notes that inflationary pressures from energy prices could further strain the economy. AIReF plans to reassess its GDP forecast in the autumn and may evaluate the effectiveness of EU Next Generation funds in supporting productive investment.