The public deficit across the Central Administration, Social Security, and autonomous communities, excluding financial aid, stood at 2.538 billion euros in the first quarter. This result marks a 51.1 percent drop from the same period a year earlier and equals 0.18 percent of GDP, down from 0.39 percent in Q1 2022. When aid to financial institutions is included, the deficit reaches 0.20 percent of GDP, according to data released by the Ministry of Finance and Public Functions in midweek. This context is relevant for audiences in Canada and the United States as they compare government spending patterns and fiscal discipline across jurisdictions.
Looking at the state deficit alone, the figure rose to 1.66 billion euros by April, reflecting a 76.5 percent decline to 0.12 percent of GDP from the prior year and a reduction from 0.53 percent of GDP in April 2022. The improvement comes as non-financial revenues grew by 10.7 percent, outpacing a 3 percent uptick in expenses, signaling a stronger revenue environment that resonates with readers evaluating public finance metrics in North America.
Officials from the ministry, led by Maria Jesus Montero, stated that the downward path in the state deficit, begun in 2021, continues due to economic recovery and job creation. A briefing noted that the trajectory remains favorable across the main public accounts. These observations are useful for comparing how public accounts respond to growth across different regions and governance models, including those in Canada and the United States.
Central government turns into a surplus, communities into a deficit
In the first quarter, the Central Government posted a surplus of 1.088 million euros, reversing a 4.383 million euro deficit recorded in the same period of 2022 and equivalent to 0.08 percent of GDP. Within the administration, the state deficit for March stood at 0.05 percent of GDP, totaling 727 million euros, marking an 87.7 percent improvement over March 2022. Governing bodies themselves reported a surplus of 1.815 million euros in March 2023. This shift from deficit to surplus highlights how timing and structure of spending can alter headline fiscal outcomes, a topic of interest for policy observers in North America evaluating quarterly results.
By contrast, the Regional Administration registered a deficit of 2.186 million euros in the first quarter of 2023, equal to 0.16 percent of GDP, compared with a 0.03 percent surplus in the same period a year earlier. The result stems from an 8.4 percent rise in expenses and a 3.1 percent increase in revenues. Within this administration, duties rose 8.5 percent, adding 1,540 million in revenue, notably from production and imports, reaching 4.477 million. Income and wealth taxes grew by 13.2 percent to 14,517 million, while capital taxes yielded 768 million euros. This contrast between central and regional finances underscores the varied fiscal pressures that can exist within a single national framework and offers a lens for cross-border comparisons with provincial or state-level budgets elsewhere.
Social Security
Social Security Funds ended March 2023 with a deficit of 1.440 million compared with 1.219 million in the same period of 2022. In terms of GDP, the deficit was 0.10 percent, slightly higher than the 0.09 percent registered a year earlier. Revenue rose by 7.1 percent, while expenses grew by 7.4 percent, with social security contributions showing strong expansion around 8 percent. The pattern mirrors global trends where aging demographics and labor market dynamics influence social security balances, a point of comparison for analysts monitoring similar systems in North America.
State taxes
The overall deficit data reflect higher revenue growth, with a 10.7 percent increase in revenue against a 3 percent rise in expenses. Non-financial resources, mainly income, reached 80,851 million, up 10.7 percent from 2022. Tax receipts totaled 68,115 million, accounting for 84.2 percent of total resources and rising 7.8 percent versus April 2022. According to the Treasury, revenue from production and imports climbed 5.9 percent, and VAT revenue increased 2.2 percent. In 2023, new tax measures include a provisional energy tax and a provisional tax on credit institutions and non-reusable plastic containers, totaling 1,596 million euros. This snapshot shows how fiscal policy tools shift revenue streams, a topic of interest for policymakers abroad evaluating energy and environmental tax design.
Current income and wealth taxes reached 25,811 million, up 21.8 percent year over year, with Corporate Tax rising 17.4 percent to 10,292 million following the first installment payment of the year. Personal Income Tax rose 7.5 percent, and Non-Resident Income Tax increased by 15.3 percent. Capital taxes totaled 72 million, while revenue from social security contributions declined by 4.9 percent. These dynamics illustrate how tax composition and timing affect annual deficits, a consideration for comparative tax policy analyses in North America.
82,511 million in government spending
Non-financial government activities spent 82,511 million through April, up 3 percent from the first four months of 2022. Transfers between public administrations, which account for about 60 percent of non-financial expenditure, reached 49,505 million in the first four months, up 5.1 percent year over year. This rise was driven by 1,666 million in extra provisions for autonomous communities and local entities to offset the 2020 liquidation deficit. Autonomous communities accounted for 30,352 million in purchases, and disbursements to the financing system reached 26,832 million, up 8.9 percent from the previous year. The Social Security System received 6,437 million, up 5.3 percent, while Local Companies received 8,929 million, up 16.5 percent. Employee compensation rose 3.2 percent to 6,225 million, reflecting a 2.5 percent wage increase for public personnel. This expenditure profile offers a baseline for international comparisons of government outlays across departments, programs, and social programs.