As indicated by different economic analysis bodies such as the Independent Authority for Fiscal Responsibility (Airef)the prolonged inflationary episode in which Spain finds itself is allowing State revenues to be refloated and enough money to be amassed to address the different spending policies undertaken in recent months, from the rise in pensions to the package of measures to deal with the war in Ukraine and the economic impact of the exorbitant increase in prices - at a cost of 16,000 million euros for the public coffers.
According to budget execution data known on Friday afternoon, in the first half of the year the State registered a public deficit equivalent to 1.8% of GDP, compared to 3.3% in June 2021. From this Thus, the budget gap stands at 23,487 million euros, which represents a decrease of 41.3% compared to the 40,031 million in the same period of the previous year.
From the Ministry of Finance and Public Function, they affirm that this result is due to a solid revenue increase non-financial of 20.4%, compared to the behavior of expenses, which grow at a rate of 2%. In other words, despite the fact that the disbursement of the State continues to grow -even though the conjunctural expense of the pandemic that caused the disarray of public accounts that still persists has been reduced almost in its entirety-, revenues do so ten times more.
a mana of resources
Furthermore, the figures for the middle of the year confirm the benefit for the State that the inflationary situation implies for the refloating of public coffers. Non-financial resources stand at 113,836 million, which implies 20.4% more compared to the same period in 2021. Of these resources, taxes reach 96,952 million, 85.2% of total resources, and grow 20.2% compared to June 2022.
Specifically, taxes on production and imports increased by 18.6%. Specifically, VAT revenues rose by 22.8%. Current taxes on income and wealth grew by 22.8% due to personal income tax, which increased by 28.2%. For its part, the Non-Resident Income Tax rose by 77.3%. Income from Corporation Tax grows by 21.9%, if the extraordinary income derived from the merger of two large entities that was collected in 2021 is deducted.
In aggregate terms, the deficit of the public administrations as a whole, excluding financial aid, stood at 19,629 million euros until May, which means subtracting 21,525 million from the figure registered a year earlier, 52.3% less, for which drops to 1.5% of GDP, according to data provided by the Ministry of Finance.
Regarding the State deficit until June, the figure stands at 1.8% of GDP, compared to 3.3% in the same period of 2021. In this way, the deficit stands at 23,487 million, which represents a decrease of 41.3% compared to the 40,031 million in the same period of the previous year.
On its side, the regional administration recorded a deficit of 3,054 million euros up to May, which is equivalent to 0.23% of GDP, higher than the deficit of 2,302 million a year before, which was shown by the autonomous communities. This result is due to an increase in expenses of 3.1%, while income grows at a rate of 2.2%.
As for the Social Security Funds, the data indicates that a deficit of 983 million has been registered until the fifth month of 2022, 70.5% less, and it has stood at 0.08% of GDP. This behavior is the consequence of practically stable revenues (the good behavior of contributions stands out with a growth of 5.0%) compared to the 2.9% decrease registered in expenses.
Income of 12,000 million from the EU
In addition, on the same day that the good behavior of public collection due to the effect of inflation was confirmed, the European Commission approved the disbursement to Spain of the second tranche of the recovery fund, amounting to 12,000 million euros, after the approval of the Twenty-seven countries of the EU and the subsequent green light of the Community Executive.
The approval of the section of the second package of milestones and objectives will entail the disbursement of 12,000 million euros, which will be added to the 9,036 million euros of pre-financing in mid-August last year and the 10,000 million euros of the first disbursement, received in 2021. This second disbursement of the recovery plan corresponds to the fulfillment of 40 milestones and objectives for the second half of 2021.
«We delivered to Spain the second payment of 'Next Generation EU' worth 12,000 million euros for the progress of reforms and investments in digital economy, health, education, labor market and consolidation of public finances“, announced the president of the European Commission, Ursula von der Leyen, in a publication on Twitter.