This forecast examines how Spanish public sector wages are expected to move over the coming years, especially in comparison with other EU civil services. A report from the European Central Bank (ECB) released last Thursday projects that wage growth in the public domain will stay softer through 2025 than private-sector earnings.
The ECB also notes that planned salary increases for public workers could interact with inflation in ways that complicate the argument for any future cuts. The Santander- and Lagarde-era projections portray a different picture for Spain than for other euro-area members, highlighting national specifics that challenge some central-guidance assumptions. Christine Lagarde, leading the ECB, has steered assessments that diverge in important ways from Spain’s own trajectory, underlining the role of domestic policy choices in shaping outcomes.
At the end of 2022, the government of Pedro Sánchez signed a three-year pact with trade unions to raise public-sector pay. The agreement foresaw increases of up to 9.5% across 2022–2024. This move framed the broader discussion on salary revaluations over several years, balancing the unions’ acceptance of reduced purchasing power in 2022 with a government commitment to stronger rises than those seen in prior years, even as price pressures remained a concern.
According to the CCOO and UGT unions, civil-servant salaries in Spain were set to rise by between 8% and 9.5% from 2022 through 2024, with the exact path depending on inflation trends and GDP growth. If the split between 2023 and 2024 is used to map the ECB’s projection window, the forecasted increase for Spanish public-sector pay sits between 4.5% and 6%. By contrast, the EU average anticipated an 8.2% uplift in that same period.
“Government salaries in the euro area as a whole, and in most member states, are expected to advance faster than inflation over the projection horizon,” the ECB stated. Spain, however, may diverge from that trend if the government’s estimates and the unions’ agreements hold true, potentially dampening the overall effect on real wages.
Civil servants continue to see their purchasing power eroded
Within one to two years, Spain’s public-sector wages are expected to climb by roughly 2.5% to 3.5%, with the exact figure shaped by GDP dynamics and inflation. The most plausible scenario places gains near 3%, against a Ministry of Economy inflation projection around 3.9%. As a result, this year’s real incomes for Spanish public workers could again slip, with salary growth projected at about 2% to 2.5% for 2024 and price pressures expected to hover around 3.2% for the same period. If the higher end of the range is realized, the purchasing power of public servants would still be eroded relative to rising prices.
Over the past two decades, a persistent decline in real wages has marked Spain. Data from Csif indicate that real wages for civil servants fell by about 33% when measured in euros rather than the old peseta. In 22 years, only five occasions saw salary increases in the general government budget that outpaced inflation.
Where the ECB’s overall estimate aligns with Spain’s experience is in the comparison to private-sector wage trends. “At the euro-area level, public-sector wage growth is expected to stay below private-sector gains in 2023–2024, then edge above it slightly by 2025,” according to ECB economists. This creates a nuanced picture: public wages lag private gains in the short term but may catch up later, depending on inflation and policy actions.
Currently, new collective agreements are delivering higher wage increases than those previously agreed in the public sector. By the end of the initial period, newly negotiated salaries rose about 4.2% versus 2.5% to 3.5% observed in recent years. In line with the multi-year deal between employers and unions, private-sector salaries are expected to grow by around 3% next year, while public-sector increases are projected at 2% to 2.5%, subject to inflation and growth trends.
Notes: Figures reflect ECB projections, national agreements, and government-pact terms as reported by the relevant unions. (ECB assessment, 2024; national sources cited for Spain’s wage settlements).