The Balearic Islands will close the 2021 financial year with the greatest investment of public resources, during a year marked by measures to help families and the business sector mitigate the social and economic effects of COVID-19. In total, more than 5,500 million euros, 20% more (almost 930 million more) than in 2020, the year the pandemic began. In these two years, this expenditure has been close to 10.2 billion.

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The increase in the volume of spending by the Government of the Balearic Islands on public policies in 2021 reached a new high of 5,523 million, with an increase of 26% (1,145 million more) than in 2019, the year before the outbreak of the COVID, and nearly 60% (2,065 million more) compared to 2015, according to data on the execution of non-financial expenditure plus the expenditure mentioned above pending allocation to the budget.

The bulk of the resources was once again allocated to social policies, for the first time exceeding 3.4 billion in health, education, social services, housing and employment policies as a whole, up to 3.418 billion, given that the Government last year extended the effort made in these areas during 2020 in the face of the COVID outbreak. This figure is 11.6% more than in 2019, the year before the pandemic.

By policy area, the 2021 budget closure shows a new increase mainly in the fundamental public services: in health, the figure of 1,961 million is reached (11.7% more than two years ago); in education, 1,110 million (an increase of almost 11% compared to 2019); and in social services, it amounts to 231 million, a percentage increase of 28% compared to the year prior to the pandemic.

Another highlight of 2021 is the increase in aid to families and companies, which has grown to around 1.7 billion euros. This sum, from transfers to private companies, families and non-profit organisations and social and health concerts, represents an increase of 194% compared to 2019, when it was 573 million. Between 2021 and 2020, this aid amounted to 2,519 million.

This increase in spending on policies has been accompanied by a reinforcement of staff, mainly in health and education, to meet the needs arising from the pandemic. By the end of 2021, the increase was 2,130 staff. In the last two years, there have been nearly 3,700 (out of more than 42,400 as well as 46,100) in the administration as a whole.

By sector, the increase has been of more than 1,600 staff in health, more than 1,300 in education and more than 700 in other services, including the administration and other entities such as the Foundation for Care and Support for Dependency and Health and Care Management of the Balearic Islands.

DEBT AND BUDGET RESULTS

In relation to public debt, according to data published today by the Bank of Spain, the Balearic Islands will close 2021 with a volume of debt of 9,005 million, 115 million less than in 2020 (9,120 million). In relative terms, the level of debt in relation to GDP stands at 31.3%, lower than the peak of 34% in 2020, marked by the fall in GDP due to the pandemic.

In terms of financing capacity or need, the Balearic Islands will close 2021 with a positive result of 1.17% of GDP in national accounting terms, once these criteria have been applied in the provisional calculation communicated today by the Ministry of Finance, in the balance of the year in which the community has made the greatest investment of resources in a context marked by the evolution of the COVID and the economic reactivation – with more expenditure and also with greater income.

The majority of autonomous communities, 10 in total, closed with a surplus in national accounting terms, according to the provisional data announced by the Ministry.

This fact is part of an atypical year due to the combined effect of the greater contribution of extraordinary funds from the State on the occasion of Covid (close to 1,200 million), and the economic reactivation after the standstill of 2020 and therefore the higher tax revenues (1,215 million), in both cases higher than the initial forecasts, as well as the maintenance of the level of resources from the regional financing system (2,882 million).

With this different approach to previous crises, the expansionary public spending policies to maintain household and business incomes have proved effective in meeting the social and economic needs arising from the effects of the pandemic and in favouring the recovery of the economy, spurred on by the extraordinary public resources.