The public deficit falls by 57.8% until August due to the rebound in income
The deficit of all public administrations, except local corporations, stood at 25,490 million euros between January and August57.8% less than in the same period of 2021 and a figure that equals 1.95% of GDP. According to budget execution data published this Monday by the Ministry of Finance, the correction of the deficit was made possible by the strong rebound in revenuethat grew 14% -especially taxpayers, who did so by 17.7%-, compared to a much more moderate advance, of 2%, of expenses.
The public deficit thus advances with room to meet the benchmark for the year as a whole, set at 5% of GDP, and there are already institutions that believe that it will remain below that figure. As usual, most of the deficit concentrated on central administrationwith a total of 21,154 million, 1.61% of GDPdespite the fact that the good performance of income allowed it to be reduced by 61.9% compared to the same period in 2021.
In the first eight months of the year, Social Security reduced by 94.2% its deficit, up to 353 million (0.03% of GDP), given the lesser impact of the pandemic on its accounts. Instead, the autonomous communities accumulated a deficit of 3,983 million (0.3% of GDP), compared to the surplus of 2021, due to the accounting effect of the 2020 settlement, when the resources advanced by the State were much higher than those that finally corresponded -a gap compensated by the State-. Only seven autonomous communities closed August with a surplus: Andalusia, Aragon, Asturias, the Balearic Islands, the Canary Islands, La Rioja and the Basque Country.
The State deficit is reduced by 72% until September
The Treasury has also published this Monday the data of the State until September, a period in which the deficit fell to 16,269 million euros, 72.2% less and 1.24% of GDP, also thanks to the boost in income. In the first three quarters of the year, the State accumulated revenues of 194,280 million, 27% more, mainly thanks to the boost in tax collection, which shot up 21.9%, but also to the accounting effect of the liquidation of the system regional financing for the year 2020.
All major taxes recorded significant increases in collection: income tax entered 43,399 million37.2% more; VAT, 70,218 million19.8% more (despite the reduction in VAT on electricity), and corporate tax, 3,496 million, 21.9% more. The collection for the tax on hydrocarbons (7.9%), the tax on insurance premiums (9%) or the tax on the income of non-residents (65.7%) also grew. With regard to expenses, they were reduced by 0.4%, to 210,549 million, partly due to the accounting effect of comparing with a 2021 financial year in which more than 4,000 million were computed for possible bad loans in the guarantees granted during the pandemic.
Thus, despite the reduction, budget execution shows an increase in spending on debt interest (18.4%), intermediate consumption (4.6%), compensation of employees (2.9%), social benefits (7.7%, due to higher spending on passive classes) or social transfers in kind (65.8%, due to higher ticket discounts for non-peninsular residents). The largest item is transfers between public administrationswhich account for 60.9% of non-financial expenses, which includes compensation to the autonomous communities for the change in VAT management for 2019 and for the negative impact of the 2020 settlement.
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