State deficit up to October jumps 37.5 percent
Excluding local government bodies, the public deficit stood at 25.893 billion euros in the first nine months of the year, up 1.1 percent from the same period in 2023 and equal to 1.63 percent of GDP.
Although the deficit rose in nominal terms because spending climbed 6.5 percent, solid economic growth allowed the deficit ratio to ease, slipping from 1.71 percent in September 2023 to around 1.63 percent this year.
As is typical, the lion’s share of the shortfall was borne by the central administration, totaling 31.516 billion euros (1.99 percent of GDP) and about 35.8 percent higher than a year earlier, reflecting the drag from the 2022 settlements of financing systems for autonomous and local administrations and from 2024 advances.
This dynamic also helps explain the healthy performance of the autonomous communities, which posted a surplus of 6.017 billion euros between January and September, equal to 0.38 percent of GDP, versus a deficit in the previous year.
All autonomous communities ended with a surplus except Murcia, which posted a deficit of 0.45 percent of its GDP, and the Valencian Community, with a deficit of 0.68 percent of GDP.
With regard to Social Security, the system closed September with a deficit of 394 million euros, equivalent to 0.02 percent of GDP, contrasting with a surplus in 2023 due to higher spending on wages and pensions.
The State deficit through October surged 37.5 percent, reaching 26.385 billion euros, or 1.66 percent of GDP, driven by the 2022 financing settlements and 2024 advances that affect both revenue and expenditure.
These factors influence how much the state collects and spends, shaping the overall budget picture.
On the spending side, total outlays rose 8.7 percent over the ten months, with transfers between administrations the largest line item, increasing 11.2 percent and representing more than half of total spending.
Additionally, interest payments on debt rose 12.3 percent, and payroll costs for public employees grew 4.2 percent following the latest salary increases.
On the revenue side, the ten months showed a 6.3 percent rise as tax collection climbed to 197.311 billion euros, up 5.7 percent from the previous year.
Value added tax rose about 7 percent, supported by the rebound in energy-related levies, while corporate income tax advanced 10.3 percent after the second installment.
In contrast, personal income tax receipts fell roughly 0.4 percent due to the accounting treatment of the regional settlement and lower wages for low earners.