Public deficit, excluding local governments, reached 37.099 billion euros in the first seven months of the year, equal to 2.34% of GDP and up 8.9% from the same period a year earlier. (Ministry of Finance)
According to budget execution data published this Monday by the Ministry of Finance, the rise in the deficit comes from public spending growing faster than revenue, with social benefits, wage payments, and interest being the main drivers. (Ministry of Finance)
From January to July, the central administration posted a deficit of 39.713 billion euros, up 13.8% and equal to 2.5% of GDP, due to the effect of settling the 2022 autonomous financing system in July, which imposed a negative impact for the State of 25.322 billion. This same factor also produced a positive effect for the autonomous communities, which reduced their deficit by 56.8% to 1.419 billion (0.09% of GDP). (Ministry of Finance)
Only six autonomous communities finished July with a deficit: Navarra (0.89% of its GDP), Valencia Community (0.77%), Murcia (0.55%), Castilla-La Mancha (0.32%), Madrid (0.29%) and Catalonia (0.22%). (Ministry of Finance)
Regarding the Social Security funds, their surplus stood at 4.033 billion, down 1.9% and 0.25% of GDP, due to higher spending on salaries and pensions. (Ministry of Finance)
Budget Execution
Budget authorities also released the state budget execution through August, showing a deficit of 38.807 billion euros, up 6.4% and 2.45% of GDP, driven by the effects of the autonomous financing system settlement. (Ministry of Finance)
In the eight months of the year, revenues reached 176.273 billion, up 6.6%, with most of it coming from tax collection – 143.683 billion, up 7.1%. Revenue growth slowed versus earlier months due to the settlement of the system, which negatively affected State income tax receipts, yet they stood at 36.370 billion, up 9.7%. VAT receipts were 60.033 billion, up 7.2%, aided by the energy-related adjustments, and corporate tax totaled 22.678 billion, up 6.6%. (Ministry of Finance)
Expenditures, on the other hand, rose 6.5%, reaching 215.080 billion, in part due to larger regional transfers under the settlement, as well as higher debt interest payments (up 14.3%) and payroll costs (up 4.7%). (Ministry of Finance)
Across Administrations
Regarding the budget execution across all administrations – State, Social Security, autonomous communities and municipalities – published quarterly, a deficit of 34.629 billion was recorded in the first half of the year, down 3.2% from the first half of 2023 and amounting to 2.18% of GDP. (Ministry of Finance)
In the first half of the year, the central administration posted a deficit of 17.365 billion (down 20% and 1.09% of GDP), autonomous communities 16.627 billion (up 19.1% and 1.05% of GDP); and local bodies 4.307 billion (up 52.6% and 0.27% of GDP); while Social Security achieved a surplus of 3.670 billion, up 34.5% and 0.23% of GDP. (Ministry of Finance)