Prices and salaries
Changes in prices and salaries in the Community of Madrid have been characterized by a behavioral pattern very similar to that of Spain as a whole, having experienced rapid growth during its expansion phase from 1994-2008.
Upon introducing the euro in the year 2000, both the country as well as the region experienced an increase in prices and salaries greater than the average for the European Union. However, the financial crisis has led to a reduction of said differences, allowing them to recover some degree of the price competitiveness that was lost.
CPI data for the Community of Madrid showed a rapid process of adjustment which slowed down in 2010 and in this same year the Community closed with a CPI of 3%. Underlying inflation shows an upward trend and closed in 2010 at 1.7%, a moderate figure.
Likewise, during the 2000-2009 period labor costs increased 38.8%, meaning an annualized rate of 1.5%.
The current financial crisis has brought about changes to said increases, with figures for the third quarter of 2009 showing a 0.2% decrease.
At any rate, a large part of the difference in labor costs between the region and Spain as a whole lies in the greater demand for qualified workers in the Community of Madrid’s economy, allowing for a higher average salary.
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