The Foundation for Applied Economic Studies (Fedea) predicts that The deficit of the autonomous communities this year will be 0.4% of GDPa figure higher than the government’s forecasts, which estimated the budget balance, and the calculation of the Independent Authority for Budgetary Responsibility (AIReF), which forecasts a deficit of 0.3% of GDP.
The think tank believes that this new forecast of a regional deficit of 0.4% of GDP “is not good news”, since The gap occurs ‘due to strong spending growth’particularly due to the increase in public consumption, which will generate “structural deterioration”.
Fedea warns that, if its deficit forecasts are confirmed, The path to reducing the deficit of all public administrations could be “jeopardized”. For this organization, with the new European budgetary rules of 2025, budgetary consolidation in Spain “can no longer be delayed” and should be “one of the main tasks” of the government. According to him, the autonomous communities should have an essential participation in the new consolidation plan because they represent “the majority of public consumption”.
The European Commission ensures that Member States respect the excessive deficit procedure (PDE). If a country records a public deficit above 3% of GDP or if the total public debt is above 60% and has an upward trend, the Commission can activate the EDP, which requires greater control of public policies. Member State.
Until July, the deficit was 1.419 million
The deficit of the autonomous communities until July 2024 was 1,419 million euros (0.1% of GDP)according to data published by the General Intervention of the State Administration on September 30. This figure represents a reduction by half compared to the same period of 2023, which recorded a deficit of 3,282 million euros (0.2% of GDP).
This improvement is due to the regulation of the 2022 Autonomous Financing System, which until July 2024 has provided the autonomous communities with 9.387 million euros more than in the 2021 regulation, which the autonomy received in July 2023. National Accounts increase by 6.9% until July 2024 (9,566 million euros). For Fedea, this growth is “worrying” because it exceeds that expected for nominal GDP (5.9%).
The calculation takes into account differential effects
To estimate its deficit forecast, Fedea starts from data from July 2024 (-0.1% of GDP) and adds the balance of the National Accounts from August to December 2023 (-0.7% of GDP). From this point, the body takes into account the differential effects revenues and expenses expected between August and December 2024.
The center considers as differential effects the increase in expected deposits and the increase in the collection of tax on real estate transfers and documented legal acts (382 million). The two effects represent in sum an increase in resources of 10.744 million euros (0.7% of GDP).
On the expenditure side, Fedea estimates the impact of the increase in expenditure recorded until July 2024 on autonomous positions of personal, intermediate consumption, social transfers in kind and interest. The organization estimates the increase in expenses at 5.480 million euros.
In the case of personnel costs, the study center also considers an additional effect. Until July 2024, an increase of 0.5% in personnel expenses for 2023 was recorded, and Fedea calculates that this effect represents a reduction in these expenses between August and December 2024 of 510 million euros. In short, The total effect represents an increase in expenditure of 4,971 million euros (0.3% of GDP).
The differential effects of income and expenditure as well as the expected balance from August to December give rise to an autonomous deficit in terms of national accounts of 0.4% of GDPaccording to calculations carried out by Fedea.
