STORY: Bank of Spain estimates 1.6 million households unable to cover their basic expenses
DATELINE: July 15, 2023
LENGTH: 00:01:37
LOCATION: BARCELONA, Spain
CATEGORY: ECONOMY

SHOTLIST:
1. various of Barcelona

STORYLINE:

According to a recent report from the Bank of Spain, one in eleven Spanish families (9%) could not afford their basic needs, such as rent, food or debt payments, with their gross income in 2022. This means that about 1.6 million households were struggling financially last year, an increase of 350,000 households (2%) from 2020.

The report blames the inflationary pressure, worsened by the Ukraine crisis, and the higher interest rates set by the European Central Bank (ECB) for the rise in financial hardship among Spanish families.

The report also reveals that despite a 6.8% growth in gross disposable income of households in Spain since 2020, inflation eroded their purchasing power by 4.5%, limiting their ability to save and spend.

Moreover, the report warns that six out of ten Spanish families (60%) do not have enough money in their bank accounts to cover a year's worth of essential expenses if they lose their income sources. This could lead to a "general slowdown in consumption."

The report also shows that the ECB interest rate hikes have made things worse for 5.5 million families with variable rate debts, especially mortgages (29.4% of all debts).

Among them, some 400,000 low-income families with variable-rate debts are suffering the most, as they spend 20% more than their income on basic needs and have savings that barely cover 20% of their yearly needs.

Xinhua News Agency correspondents reporting from Barcelona, Spain.
(XHTV)