Catalonia is the territory where public spending per inhabitant of the autonomous administration grew the most between 2003 and 2023, 49%. It is almost double the increase recorded in the Canary Islands (25%) or Madrid (29%). The regional average is 32%. The data published annually by Fedea are in constant euros (they do not take inflation into account) and account for non-financial spending that includes both investment and interest on debt as well as current spending.
Fedea explains that the aforementioned non-financial expense “could be a reasonable indicator of the level of service provision of regional administrations.” In the current expenditure variable (without interest or investments), Catalonia also leads the growth: 55% compared to 43% for all communities or 38% for Madrid.
Sources from the Department of Economy of the Generalitat, headed by Natàlia Mas, maintain that “the data show that we have left the cuts behind, given that, apart from investing more than in 2003, we are already investing more than in 2009.” The same sources highlighted that the investment occurs “despite the chronic underfinancing that Catalonia suffers, regardless of whoever governs in Moncloa.”
Although all communities except the regional ones are governed by the same financing system, income varies if use is made of the regulatory capacity to raise taxes such as the regional income tax section, impose new ones or incur a deficit.
Regarding the deficit, the Fedea report, prepared by its general director, Ángel de la Fuente, highlights that the raw data “from recent years are quite misleading.” And he adds that the good data for 2020 and 2021 are fundamentally due to an increase in extraordinary transfers from the State above what would have been necessary to cover expenses due to the pandemic.” And, on the other hand, “the disappearance of these transfers, together with the peculiar mechanics of the Autonomous Financing System, explain the sharp rise in the deficit during the last two years despite the recovery.”
In 2023, all communities closed with an aggregate deficit of 0.91% of GDP. Although the deficit is not met jointly, there are five (Navarra, Balearic Islands, Canary Islands, Asturias and Cantabria) that closed the year with positive balances and two more (Galicia and the Basque Country) that met the deficit. The rest closed with a deficit greater than 0.3%. Valencia and Murcia stand out with budget gaps close to 2.5% of GDP. Catalonia registered a deficit of 1.3%.
