At its meeting today, the Council of Ministers approved the 2024 spending ceiling, which is the highest in history. The Ministry of Finance raises the limit of non-financial spending to 199,120 million, 0.5% more than the current year. This figure includes the 9,905 million that will be provided by transfers from European funds (not loans). With the return of fiscal rules and the mandatory contraction of the deficit to 3%, the Government has already defined the broad lines under which the first General State Budgets of the legislature will be configured, which the Government hopes to definitively approve next month. March.
The spending ceiling without including recovery funds for next year reaches 189,000 million, 9.3% more than that of 2023, according to the agreement reached today by the Council of Ministers.
The fourth vice president and head of the Treasury, María Jesús Montero, has advanced that it is, however, a “prudent” spending ceiling, because collection continues to increase, and that the Government has room to extend from on January 1, some of the measures to combat inflation.
Specifically, Montero has advanced that the Treasury estimates that tax revenues will grow next year by 9% compared to the final settlement of 2023, which will already be the highest in history.
The Executive has already announced that it will extend the discounts on public transport during 2024, including free Cercanías, Rodalies and medium-distance trains; that it will expand aid to young people, pensioners and the unemployed so that they can travel on public transport for free; and that it will extend the VAT reduction on basic foods during the first semester. It remains up in the air to clear up the question of whether the reduction in energy taxes, including VAT, will be maintained. The decision on this latest aid will be made in the coming days, Montero clarified.
Approving the spending ceiling is the responsibility of the Executive and, therefore, does not have to be subject to validation by the Cortes Generales. The novelty for next year is the lifting of the suspension of fiscal rules, pending the debate that is taking place in the EU. Even if there is no consensus, the deficit must necessarily be at 3%.
Regarding the path of stability, which does have to undergo validation in the Congress of Deputies and the Senate, Montero has confirmed the objectives advanced yesterday in the Fiscal and Financial Policy Council. The Government estimates that the public deficit will close this year at 3.9% and that next year it will be reduced to 3%, in order to comply with community demands. The Minister of Finance highlighted today that the administrations have managed to reduce almost 50,000 million in budget gaps in two years, “and all this without cutting social measures and maintaining economic growth,” Montero highlighted.
The Government offers the autonomous communities an improvement of one tenth of their budgetary commitment. Thus, the deficit of the autonomies could be placed at 0.1%, compared to the budgetary stability foreseen in the April Stability Plan. In 2025 and 2026, regional governments must comply with budget balance, while public accounts will have to comply with a deficit of 2.7% in 2025 and 2.5% in 2026.
Montero has highlighted that the central administration will once again assume the greatest effort to reduce the deficit. Autonomous communities and city councils “will have more fiscal margin and will have record resources” in 2024, highlighted the Minister of Finance.
