He Government it’s heading Salvador Illa He begins his journey with a slab behind him: the payment of debt interest of the Generalitat of Catalonia. According to a report from Foundation for Applied Economic Studies (Fedea)Catalonia will be the community that will devote the highest financial expenditure to interests until 2027, almost 3 billion, double that of Madrid.
Fedea prepares its calculations based on the nominal GDP growth forecasts and the public deficit reference targets of the autonomous communities included in the Spanish Economic Situation Report 2024the average life and durations of public debt currently in circulation, as well as interest rates in effect since 2015.
He average rate of Catalan debtdefined as the quotient between the annual interest payment and the actions of public debt at the end of the year, will reach 3.3% in 2027 against 1.2% in 2022In the case of Madrid, it will reach 4.2% within three years.
However, the highest average rate projected by Fedea for 2027 corresponds to Asturias, with 4.6%, while the lowest will be that of La Rioja, with 2.4%.
The increase in the average debt rate will be greater in communities where part of the debt is in the hands of the State through the Autonomous Liquidity and Financial Facility Fund than in those that are not financed by these extraordinary mechanisms (Navarre, Basque Country and Madrid).
Deficit target
Overall, the financial expenditure of the communities will reach 12 billion euros in 2027or more than triple the 3,608 million euros of 2022. This increase, explains Fedea, would be a consequence of the “significant rise” in interest rates that regional treasuries are already facing and whose level is expected to remain in the years to come, as well as the high volume of public debt.
By 2024, the think tank This means that the autonomies will close with a deficit of 0.3%, a percentage predicted by the Independent Authority for Fiscal Responsibility (AIReF).
In view of these results, Fedea urges regional governments to calibrate “very cautiously” all expansionary fiscal policies that they can develop now and in the years to come.
“Like all administrations, they must be aware that embarking on significant tax cuts and/or spending projects with dubious social profitability can harm the sustainability of their finances,” he warns.
