The institution chaired by Cristina Herrero will lower its forecasts in the face of the worst estimates for consumption
The Independent Authority for Fiscal Responsibility (AIReF) has estimated the cost of the last decree law approved by the Government to extend the economic response to the energy crisis at 6,989 million euros, which as a whole already represents an increase in the public deficit of 1% of GDP.
This was stated by its president, Cristina Herrero, during her appearance before the Finance and Civil Service Commission of Congress, which she attended this Monday to report on the Report on the update of the 2022-2025 Stability program.
In total, AIReF quantifies the extension of the tax reductions on electricity, extended with the reduction of five more points, up to 5%, of the VAT levied on the electricity bill at 1,772 million euros of revenue loss.
In this calculation, this body excludes the suspension of the Tax on the Value of the Production of Electric Energy (IVPEE), of 7% that the companies borne, considering that it has a neutral impact in terms of deficit because it is an income that is assigned to cover the tariff deficit with the electrical system.
Of the remaining 5,217 million euros, AIReF estimates the extension of the bonus of 20 cents per liter of fuel at 3,465 million, the figure for aid to individuals is 1,257 million --540 million direct aid, in which the check is framed to families for the cost of inflation-- and 495 million for sectoral aid.
Although the Government's scenario proposes a convergence of the deficit to the threshold of the Stability Pact (3% of GDP) in 2025 and a path of debt reduction, AIReF considers that there are still elements that recommend a medium-term strategy that strengthens the underlying position of public finances and reduce vulnerability to adverse environments. For this reason, it maintains its recommendation to the Ministry of Finance to establish a medium-term fiscal strategy that serves as fiscal guidance and realistically and credibly guarantees the financial sustainability of the Public Administrations.
In this sense, Cristina Herrero recalled that sustainability is at the core of the ECOFIN guidelines. Although the quantitative rules have been replaced by guidelines, by 2023 certain quantitative elements have already been incorporated and point to adjustment paths after 2023. Specifically, Spain has been recommended a prudent fiscal path with growth in current spending with national financing lower than the potential GDP which, if applied, would lead to a deficit lower than forecasts by AIReF and the Government. Beyond 2023, a credible and gradual debt reduction path is recommended.
On the other hand, AIReF formulates a new recommendation on the need to allocate income that materializes above expectations and those of a temporary nature to accelerate the necessary reduction of the structural deficit and avoid increases in spending or reductions in income of a structural nature that do not have structural financing as well. And another recommendation on the importance of evaluating the impact of the measures already adopted in terms of efficiency, effectiveness and redistributive impact before, if necessary, deciding on their possible extension.