The government deficit reached 36.313 billion euros by August, marking a 42.4 percent rise from the same period last year, an increase of 25.509 billion. This gap represents 2.54 percent of GDP, up from 1.89 percent in August 2022, according to the Ministry of Finance.
The rise in the deficit to 2.54 percent of GDP in August, up by 0.65 percentage points year over year, is mainly attributed to the impact of end-of-year payments. The 2021 financing framework shows 11.798 billion euros in favor of autonomous communities and local authorities, compared with 6.106 billion in favor of the State in the previous year, the Ministry notes.
Regarding the unified deficits of the Central Government, Social Security, and autonomous communities excluding financial aid, the level stood at 31.299 billion euros until July, reflecting a 19.1 percent increase from the prior year and amounting to 2.19 percent of GDP, versus 1.95 percent in the same period in 2022, according to the monthly balance.
If aid to financial institutions is included, the deficit would rise to 2.21 percent of GDP, as reported by the Ministry of Finance and Public Service on Friday.
Specifically, the Central Government showed a deficit of 34.449 billion euros at the end of July 2023. Autonomous communities registered a deficit at 2.41 percent of GDP, up from 1.633 percent last year, while other regional administrations posted a deficit of 1,142 million euros, equal to 0.08 percent of GDP, compared with 0.36 percent in the same period the previous year, according to official notes.
By July 2023, Social Security Funds posted a surplus of 4.292 billion euros, rising from 0.561 billion a year earlier. In terms of GDP, the Social Security Funds balance represents a surplus of 0.30 percent, higher than the 0.04 percent observed in 2022.
State tax revenue increased by 1.6%
Turning to state data, non-financial resources or revenues stood at 163.379 billion euros, which is 2.4 percent lower than the same period in 2022. Taxes reached 133.961 billion euros, accounting for 82 percent of total resources, and rose by 1.6 percent compared with August 2022, as reported in the latest figures from the ministry (Ministry of Finance report).
The report notes a 1 percent uptick in taxes on production and imports. Among non-financial resources, 2023 tax developments include new measures such as the Special Tax on Non-Reusable Plastic Containers, the Temporary Energy Tax, the Temporary Tax on credit institutions and financial entities, and the temporary solidarity levy on large fortunes. In national accounting terms, the total amount collected by August reached 2.285 billion euros, according to the ministry’s accounting snapshot.
Collection increased by 11.8% according to companies
On the revenue side, current taxes on income and wealth totaled 58.436 billion euros. Corporate tax receipts were 2.6 percent higher than the first eight months of 2022, driven by an 11.8 percent rise to 21.281 billion euros, largely due to a 21.8 percent increase in the first installment collection, a fact highlighted in the ministry’s report (Ministry of Finance).
Personal income tax income reached 32.904 billion euros, up 7.1 percent from the previous year, while non-resident income tax receipts amounted to 2.595 billion euros, up 28.9 percent.
Expenses increased by 3.6%
Non-financial expenditures through August stood at 199.692 billion euros, up 3.6 percent from the first eight months of 2022, according to the latest fiscal figures.
The largest share of non-financial outlays consists of transfers between public administrations, which account for 63.5 percent of total non-financial operations. In the first eight months of the year, these transfers rose 7.9 percent compared with 2022. The increase is largely due to the additional provision of 1.666 billion euros allocated to Autonomous Communities and Local Enterprises to offset the negative 2020 balance in the general settlement, a detail noted in the report.
Regionally, the Regional Administration received 69.867 billion euros, with 62.001 billion of the total transfers tied to the financing system, up 11.4 percent from 2022. Of this amount, 53.664 billion relate to payments from the account, while the remainder reflects the impact on the final settlement expense for 2021.
In contrast, Social Security System contributions received 29.753 billion euros, up 5.058 billion from 2022. The increase mainly stems from allocations for financing maternity and child care benefits tied to the contribution framework.
Local Government received 17.299 billion euros, up 15.1 percent from the prior year. Of this total, 15.136 billion euros correspond to state revenue participation, up 6.7 percent year over year. The final amount includes 14.442 billion euros in on-account payments, with the remaining share reflecting the 2021 final settlement impact on expenses.