THE Bank of Spain has warned that the country’s economy will need around 24 million migrant workers until 2053 if the pension system is to remain sustainable.
The stark warning came in its annual report, covering 2023, and in which it raises the alarm over Spain’s ageing population and the consequences this will have for retirement payments.
Spending on pensions in 2023 reached 13.1% of the country’s GDP, and the central lender predicts a ‘substantial rise’ in this percentage given the demographic shifts in the country, as the birth rate continues to fall and average ages rise.
The bank’s report also points out that there is a system in place since a reform of Spain’s pension system for the government to have to intervene with a series of measures by 2025 should spending in this area exceed 13.3% of GDP.
This could include an increase in Social Security payments for workers, but the Bank of Spain had a warning about such a measure.
“Basing the financing of the pension system exclusively on an increase in Social Security contributions could be detrimental to employment and the competitiveness of the Spanish economy,” the report reads.The report also points to the growth outlook for the Spanish economy, according to online newspaper Publico, with a ‘relatively favourable’ forecast for the years 2024 to 2026.