Public deficit latest publications
Sound budget execution data introduce positive biases on the deficit forecast in 2022, while the slowdown in activity in 2023 will dampen the cyclical recovery of the government balance. Deficit projections are revised to 5.5% of GDP in 2022 and 5.4% in 2023.
2021 closed with a deficit of 6.8% of GDP, the same as estimated three months ago. The invasion of Ukraine and measures to mitigate the rise in energy prices slow down the adjustment, and the deficit is expected to fall to 6.0% in 2022. In 2023, the deficit would fall to 4.6% of GDP.
The latest budget execution data lead to a revision of the deficit to 6.8% in 2021 and 4.8% in 2022. In 2023, the cyclical recovery of activity will favour the correction of the public deficit to 3.0%. Implementation of the Recovery Plan remains sluggish, and support will take time to reach households and firms.
The rise in infections over the past month and increased costs throughout most of the past year herald a weakening of the recovery in Spain at the beginning of 2022.
Good budgetary implementation data introduce positive biases on the deficit scenario, and the forecast is revised to 7.0% of GDP in 2021 and 5.0% in 2022. The expected impact of the Recovery Plan in 2021 is downgraded and carried forward to the following years.
Positive development on tax collection and a lower impact of the pandemic introduce biases in the deficit forecasts, which are revised to 7.7% of GDP in 2021 and 5.5% in 2022. The approval of the Recovery Plan and the suspension of fiscal rules anticipate that fiscal policy will remain expansionary.
The 2020 health crisis resulted in a large deficit of 10.1% of GDP and pushed public debt up to 120%. Going forward, fiscal policy will be conditioned by the suspension of fiscal rules and the arrival of Recovery funds, which suggests that it will remain expansionary.
After weeks of waiting, the Government's tax and social reform proposal is now published. The proposal seeks to stabilize the public debt and presents several issues to improve the tax system and social spending, while some issues should be discussed deeply and free of passionate feelings.