The President of the Government, Pedro Sánchez, announced this Wednesday that Spain closed 2023 with a public deficit of 3.7% of GDP, two tenths below the objective committed to Brussels (3.9% of GDP).
During the Government control session, Sánchez stressed that the Government expands rights “with fiscal responsibility” and the good economic performance has made it possible to “meet the (deficit) objectives that we had set for ourselves.” The figure reduces the gap in 2022 by one point (4.8%).
The improvement in the deficit is supported by maximum tax collection, a boost in tourism and GDP growth of 2.5%, much higher than that of other European countries. “Thanks to the good economic performance of the country, I can already guarantee (…) that we are going to close with a public deficit of 3.7%,” he said in a response to the leader of the opposition, Alberto Núñez Feijóo.
To confirm the figure, we will have to wait until March 27, when the Ministry of Finance will publish the closing data for budget execution for 2023. It is the last year in which European fiscal rules remain suspended after the outbreak of the pandemic.
The figure comes shortly after the Executive has given up on preparing accounts for 2024 and the last ones were extended, given the difficulty in their potential approval. The scenario considered for 2024 was that of a deficit of 3% or less.
The resignation has left several key investments up in the air. Thus, the Government is now focusing on next year, as has been recognized, a year in which Brussels has precisely requested a “slight fiscal adjustment”, trying to combine a return to discipline in numbers with the need to continue investing so as not to remain back in the race of digitalization, energy transition or defense.
Another front that is open in terms of public finances is the disbursement of European funds. Last week Madrid and Brussels reached an agreement for a two-month extension to evaluate the fourth payment of European funds, about 10 billion euros, pending above all the unemployment benefit reform, which was rejected in a first attempt. in Congress. With the agreement, there is time until May 20 to meet the pending milestones and for Brussels to evaluate the progress, after disbursement.
