Spain | No fiscal adjustment in 2019

Budget execution data up to Nov-19 anticipate a further structural deterioration of the structural balance during 2019. For 2020-2021, and pending the completion of the new government's budget programme, the recently approved measures maintain the expansionary tone of fiscal policy

Key points

• Key points:
• The State deficit up to Nov-19, excluding local corporations, stood at 1.7% of GDP, worsening by two-tenths of that observed in the same period last year
• The general government deficit could reach 2.4% of GDP in the year to Dec-19, which would confirm the expansive and pro-cyclical tone of fiscal policy over the past year; in addition to a further breach of the stability target (-1.3% of GDP) and the government's forecast
• Government revenues are reported to have moderated their growth rate, while public spending followed a slightly expansive dynamic, in line with BBVA Research's forecasts three months ago
• In the absence of fiscal adjustment measures, the general government deficit could remain around its current level during the next biennium

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