The Generalitat considers the new deficit limit established by the Spanish Government at 0.1% of GDP for the year 2024 to be “completely insufficient”, explained sources from the Department of Economy, headed by Natàlia Mas. The Government of Pedro Sánchez reported that it has raised from 0% to 0.1% the deficit that the autonomous communities will be able to incur next year, in accordance with the stability program published yesterday.
In the April progress of this program, the allowed deficit was 0%. Taking into account Catalonia’s GDP, the additional tenth collected by the stability program means a little more than 200 million euros more in spending next year for the community. Obviously, the increase in the budget will occur in all the autonomous regions in a greater or lesser amount.
Sources from the Department of Economy recalled yesterday that the Generalitat has been defending for years that, taking into account that the expenditure assumed by the communities is around a third of that assumed by the State as a whole, the limit of deficit should also be of a third for the autonomies. The forecast deficit for next year is 3% for the entire State, which means that the communities should have 1% following the option defended by the Generalitat.
When an administration spends more than it brings in, it incurs a deficit that is financed by borrowing. Next year, communities will only be able to spend as extra the equivalent of 0.1% of their GDP. And the central government by 2.9%. Initially, a surplus of 0.2% was proposed for 2024, which was reduced in April to this deficit of 0.0%, and now it is 0.1%.
This year the deficit limit was set at 0.3%. In the stability program it is detailed that, in April, “the estimate for the closure of the autonomous communities subsector was -0.3% of GDP, in line with the reference rate” and now it is estimated which will close this year at -0.6%. Last year – which was the first to emerge from the covid crisis – Catalonia closed with a deficit of more than 1% of GDP.
In the meantime, the Generalitat is still waiting for the central government to receive the information necessary to draw up its budgets. The Ministry of Economy regrets that the Treasury has not yet informed it of the advance collection for next year or of the latest settlement of the financing model. The publication of the deficit limit does not represent even 1% of the Generalitat’s budget.
In the Spanish Government’s plan published yesterday, the loss of revenue to the communities is estimated due to the downward trend of several autonomies in the tax on the heritage and in that of inheritances and donations. In 2023, the lowest revenues are 109.9 million and 71.8 million respectively for each tax. For 2024, the drop in collection will be a little more than 320 million between the two taxes. This loss of income for the communities cannot be compensated with the increase in revenue derived from the new environmental taxes. The forecast increase in 2023 is 241.7 million, thanks to the implementation of the tax on the deposit of waste in landfills, the incineration and co-incineration of waste.
