A Tale of Two Economies: Growth Versus Inequality
As has been the case in recent years, the Canary Islands’ economy is growing and continues to generate employment, a trend in which the thrust of the tourism sector is decisive. Aside from the lack of economic diversification and its environmental and social implications, this might, at first glance, be considered a successful period. But it is less so, far less so, when that persistent increase in Gross Domestic Product (GDP) is not distributed adequately, substantially boosting the incomes of the wealthiest while a large part of the population faces growing difficulties in leading a dignified life. This chronicles poverty and consolidates an increasingly unequal society.
Sustained Economic Growth Post-Pandemic
Let us begin with the economic growth, which is undoubtedly very significant. The path of growth in the Canary Islands following the brutal drop in 2020 due to the Covid pandemic has been very intense. The previous progressive government had already managed, by June 2023 at the end of its term, to equal the pre-pandemic GDP level of 2019. Furthermore, in recent years the increase in GDP has been higher than the Spanish national average.
In its amendment to the entirety of the 2026 Canary Islands Budget, Nueva Canarias-Bloque Canarista (NC-bc) considers that in this financial year of 2025, Canarian GDP growth will be above 3.5% (far higher than the 2.9% forecast in the Budget Project’s Economic Report), taking into account its evolution in the first three quarters of the year (an average of 3.6%, according to ISTAC).
Record-Breaking Tourism Fuels the Boom
This growth in the Canaries is fundamentally sustained by the extraordinary situation of the tourism sector, which is posting the best figures in its history. According to ISTAC data, 2024 saw an absolute record for tourist arrivals with 17.8 million visitors—2.7 million more (17.9%) than in the pre-pandemic year of 2019. The most conservative estimate predicts the year will end with around 18.6 million tourists. Furthermore, tourism revenue rose in 2024 to €22.351 billion, a figure never before reached. This is €2.786 billion more (14.2%) than in 2023, when tourism income was €19.565 billion.
The Quality of Employment Lags Behind
Regarding employment, the growth estimates for the Canary Islands Community are below the forecasts of the Independent Authority for Fiscal Responsibility (AIReF). They point to employment growth of 2.1% in 2025 and 1.1% in 2026. AIReF’s estimates for employment foresee growth of around an additional percentage point in each of those years. A completely different matter is the quality of that employment, in terms of low pay, poor working conditions, instability, and precarity.
Thus, in 2024, despite good economic data for companies, the Canary Islands is the autonomous community with the lowest average gross salary, at €2,051.7 compared to the national average of €2,385.6.
Structural Poverty in a Wealthier Archipelago
With such spectacular economic data, one might deduce that the quality of life for Canary Islanders has improved in parallel. Unfortunately, this is not the case. The middle and working classes see their incomes insufficiently increased while inflation rises and causes them to lose significant purchasing power. Yesterday’s wages, already low, with today’s much higher prices. Wealth is increasingly concentrated in fewer hands.
A minority of 7,113 people jointly accumulate wealth of €25.811 billion, equivalent to 47.6% of the Canary Islands’ 2023 GDP. Furthermore, as a report from the University of La Laguna points out, the top 10% of wealth-accumulating households own approximately 60% of the wealth, and the bottom half of households (the 50% with the least) own only between 2% and 4% of the total wealth of our archipelago. It also notes that the richest 10% accumulate between 80 and 85 times more wealth than the poorest 50% in the Canary Islands. In the rest of Spain, that ratio is between 45-50 times.
Moreover, the impact of GDP growth on poverty reduction is clearly insufficient. And some factors, like housing, contribute even more to the impoverishment of a significant part of the population. The Canary Islands are globally much richer, but most of its people do not see an improvement in their difficult conditions.
Alarming Poverty and Exclusion Statistics
As numerous investigations highlight, the structural nature of poverty in the Canary Islands means that economic growth alone is not enough to reduce inequality. Policies from public administrations, separate from the market, are needed to fight inequality and poverty. When this is not done, poverty becomes chronic. Various studies, reports, and data confirm that the Canary Islands are failing in this subject.
The AROPE rate in the Canary Islands in 2024 was 31.2% of the population, compared to 25.8% in Spain. This means that 695,402 people are at risk of poverty and/or social exclusion, which is what this rate—configured with a common methodology by the European Union—measures. It remains 5.4 percentage points above the national average and is the fifth highest rate among the autonomous communities.
Meanwhile, the severe poverty rate affected 10.1% of the population in 2024, growing by 0.4 percentage points compared to 2023 (9.7%). This figure in Spain was 8.4%. Severe poverty is measured using the threshold of 40% of the median income in Spain. This means that in 2024, there were 225,000 people in the archipelago with incomes below €644 per month, that is, below the threshold marking the most extreme poverty.
There are also alarming data on child poverty: 40.2% of children and adolescents in the Canary Islands (about 91,000) live at risk of poverty or social exclusion, one of the highest rates in the country.
Tax and Labour Policies: Fuelling the Divide
The French economist Thomas Piketty, a specialist in economic inequality and income distribution, emphasises that taxes and state policies play a key role in trying to mitigate inequality, stressing wealth and inheritance tax figures to bring about a genuine redistribution of wealth. The Canary Islands government of CC and PP is doing precisely the opposite.
This is demonstrated by its elimination of the Inheritance and Gift Tax, which taxes the transfer of wealth, favouring a small, privileged minority who inherit estates worth more than €300,000 per heir. This means the Canary Islands Community will lose €180 million in revenue during this legislative term.
When the wealth generated remains, to a large extent, in the hands of a few; when taxation is not progressive and clearly benefits the wealthier minorities; when social policies are insufficiently funded and poorly managed, as is the case with dependency care; when the same happens with the treatment of public services; when wages are very low and the shopping basket remains one of the most expensive in Spain; when one of the main problems, housing, merits barely €25 million in public accounts that total €12.491 billion—when all this happens, the Canary Islands is condemned to continue presenting unacceptable figures for poverty and inequality, widening the social abyss.
The Urgent Need for a Policy Shift
A profound change in economic, fiscal, and social policies is urgently needed, along with more and better employment, so that this society can be fairer and more cohesive. So that the good economic data truly impacts collective wellbeing.
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