The aggregate of the autonomous communities closed September this year with a surplus of 6.017 billion euros in their public accounts, equivalent to 0.38% of GDP, a figure that stands in sharp contrast to the deficit of 3.398 billion euros recorded in the same period of 2023.
According to statistics published on Friday by the General Intervention of the State Administration, all the autonomous communities managed to keep their budget balance in the green, with Valencia and Murcia remaining in the red. In the case of Catalonia, the autonomous community finished the third quarter with a surplus of 971 million euros (0.32% of its regional GDP), compared with a deficit of 1.044 billion euros (0.37% of GDP) in the same period of 2023.
The difference between the positive performance of the nine months of 2024 and the red numbers of 2023 is mainly due to the final liquidation of the 2022 autonomous financing system for regions with a common regime, carried out in 2024, which had a net positive effect of 20.740 billion euros for these communities (higher by 9.584 billion than the favorable result from the 2021 liquidation, carried out in July 2023, which stood at 11.156 billion). Additionally, in September the update of the 2024 current allocations, with effects from January 1, entered the communities’ coffers, providing a positive impact of 6.444 billion euros.
Airef Forecasts
These two rounds of state transfers, linked to the system of regional financing, have allowed most autonomous communities to post a surplus in the third quarter of the year. However, this does not guarantee a year-end return to green balances. According to the Independent Fiscal Responsibility Authority, Airef, the overall deficit for 2024 is projected at 0.3% of GDP, with eight regions remaining in the red: Castilla-La Mancha, Catalonia, Madrid, Murcia, Navarra, the Basque Country, and Valencia.
On the other hand, Andalucía, Extremadura and Galicia are expected to close the year in balance. For Aragón, Asturias, the Balearic Islands, the Canary Islands, Cantabria, Castile and León, and La Rioja, only slight budget surpluses are projected.
Surprisingly, this is not the first time a temporary surplus appears in the third quarter. Historically, in this period the financing that had been granted two years earlier is settled, and depending on the economic cycle, it translates into a substantial injection of resources. The same pattern recurred in 2007, 2017, 2018, 2020, and 2021. Now, in 2024, the definitive liquidation of the 2022 provisional financing will reach the communities, accompanied by higher-than-expected tax receipts during that year.
State Deficit
Apart from the accounts of the autonomous administrations up to September, the General Intervention of the State published this Friday the figures for the consolidated deficit of the central administration, the autonomous communities, and Social Security for September, along with the budgetary advance for October.
In particular, the deficit of the State up to October stood at 26.385 billion euros, equivalent to 1.66% of GDP. This rate marks a 0.5 percentage point improvement versus September, but remains higher than the same period a year earlier, when it stood at 1.28% of GDP.
Unlike the trend observed in the communities, the expansion of the State deficit was largely driven by the definitive liquidation of the 2022 financing system for autonomous regions and local governments, carried out in July 2024, which increased the deficit for the State by 13.523 billion compared with the prior year.
Up to October, non-financial resources grew 6.3% compared with the same period in 2023. Tax collection rose 5.7% compared to October 2023. Meanwhile, non-financial expenditures increased by 8.7% in the same period.
By September 2024, the combined deficit of the central administration, Social Security funds, and autonomous communities stood at 25.893 billion euros, or 1.63% of GDP, including financial aid. Excluding this aid, the deficit would be 26.328 billion. This marks a reduction from 1.71% of GDP recorded in the same period of 2023.