Macroeconomic forecasts from AIReF, which already consider the impact of the conflict in the Middle East, indicate that inflation will grow by 3.2% this year, while wages will only increase by 3%. This disparity will result in a decrease in purchasing power for Canarian families, who already started from a situation of historically low wages.
The autonomous community has experienced a 4.7% loss in purchasing power since 2021, due to the inflationary shock caused by the war in Ukraine. Although there was a partial recovery of 3% in the last two years, after a 7.8% drop between 2021 and 2023, the trend does not seem to be reversing.
The most recent data, from January to March 2026, showed a positive resilience in the difference between the CPI and wages, with a modest 0.46%. However, the year-on-year data for March already indicates a change in trend, interrupting the recovery initiated due to the conflict in Iran and the subsequent fuel crisis.
“"We will find ourselves with a more expensive and less competitive economy."
The impact will be more noticeable for private sector workers, whose wages are not reviewed as frequently as incomes dependent on government decisions, such as the minimum wage or pensions. Collective agreements fail to adjust wages to the real pace of prices, creating a structural imbalance.
This dynamic affects the entire economic fabric, as wage increases without productivity improvements become an additional cost for companies. This can lead to passing these costs on to the final price, fueling inflation, or reducing margins to the limit, with the consequent risk of losing competitiveness. The energy dependence, remoteness, and territorial fragmentation of the Canary Islands amplify these external disturbances.
In the short term, the tightening of monetary policy by the European Central Bank, with a foreseeable interest rate hike, will add pressure on indebted households, affecting both the cost of living and variable-rate mortgages.
