Sat. Apr 20th, 2019

The deficit will deviate this year by 10,000 million euros

The deficit will deviate this year by 10,000 million euros


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The set of Public Administrations will not meet the deficit target of 2019, set at 1.3% of GDP. The Independent Authority for Fiscal Responsibility (AIReF) slightly improves the deficit estimate, but continues to consider "unlikely" that the target is reached, since it places it at 2.1%, one tenth below its previous forecast and eight tenths above the path for this year, according to the agency in its report on Initial Budgets of Public Administrations. This will mean a deviation of about 10,000 million euros.

The slight upward modification is mainly due to the non-approval of the General State Budgets for 2019 and the consequent budgetary extension, which meant that a relevant part of the measures was not implemented, which had a positive effect about the deficit. The Tax Authority estimates that the final estimated amount of the "social fridays" is 920 million of euros, since its entry into force has been delayed until the second quarter of the year and the measure to improve dependency has not been developed, for an amount of 500 million euros. Last January the agency estimated the expenditure of these social measures at 1,633 million.

AIReF is in a "difficult position" to make recommendations, since the political situation and the rejection of the General State Budgets of 2019 make it difficult for the second part of the year to take measures that produce a significant impact on the result fiscal. However, the agency indicates that what the government should do after the elections on April 28 is to set fiscal stability targets for the next three years under a path of reducing public debt. It also considers important that the Ministry of Finance apply the regulations for the autonomous communities to allocate their surplus to debt repayment and warns of the need to establish a monitoring of the Central Administration and Social Security to detect possible risks in advance. The Treasury assures that it already carries out this procedure, but AIReF demands that it be public and that it be transferred both to the general courts and to the body itself.

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