The path of deficit reduction initiated in 2021 and confirmed in 2022 as a result of economic recovery and job creation continues.

The Ministry of Finance and Public Function has published today on its website a series of data corresponding to the budget execution of the Public Administrations in 2023.

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The government deficit stood at 1.37% of GDP in October

The State deficit up to October stands at 1.37% of GDP, compared to 1.58% in the same period of 2022. Thus, the deficit up to October stands at €20,053 million, largely due to the impact that the final settlements of 2021 practised in July 2023 have had with respect to the result of the final settlements of 2020 made in 2022. Specifically, the final settlements of the 2021 financing system amount to 11,798 million in favour of the Autonomous Regions and the local governments, compared to last year’s 6,106 million in favour of the State.

Likewise, the Ministry of Finance and Public Function has also published today on its website the consolidated deficit data of the Central Administration, Autonomous Communities and Social Security for the month of September in terms of national accounting, decreasing to 1.54% of the GDP, compared to 1.68% a year ago.

State deficit – October
Up to the tenth month of the year, the State has recorded a deficit equivalent to 1.37% of GDP, down from 1.58% in the same period last year. This brings the deficit to 20,053 million, a decrease of 5.7% compared to October 2022. The deficit is strongly affected by the definitive settlement of the financing system of the Autonomous Communities and Local Corporations corresponding to fiscal year 2021, carried out in July 2023, implying an increase in the deficit for the State of 11,798 million.

Non-financial resources of the State
Non-financial resources amounted to 222,917 million, which implies an increase of 0.4% with respect to the same period of 2022. Taxes amounted to 186,454 million, 83.6% of total resources, and grew by 3.1% compared to October 2022.

Taxes on production and imports increase by 2.2%. Within non-financial resources, as tax novelties in 2023, the income from the new Special Tax on Non-Reusable Plastic Containers, the Temporary Energy Levy, the Temporary Levy on Credit Institutions and Credit Financial Establishments and the Temporary Solidarity Tax on Large Fortunes with a combined amount of 3,934 million stand out.

Current taxes on income and wealth amounted to 87,659 million, 4.2% higher than in the first ten months of 2022, due to an increase of 7.9% in income tax revenues, up to 39,009 million. This increase is mainly due to the increase in the collection of installment payments and, on the other hand, to the 11.8% increase in the income corresponding to the annual tax return. In turn, personal income tax reached 43,401 million and, in turn, non-resident income tax revenues, with 2,911 million, increased by 18.7%.

Likewise, taxes on capital reached 169 million euros and revenues from social security contributions fell by 1.8%.

Property income reached 7,041 million, which is 90% more than in October 2022, as a result of higher income from dividends and other income, which rose to 2,999 million. Also due to the increase in interest income from 1,614 million reached in October 2022 to 4,042 million recorded in the same period of 2023.

Revenues from the sale of goods and services showed a growth of 6.1%. Finally, other resources, with 8,218 million, increase by 56.3%; within this remainder, it is worth noting the increase in investment aid from 2,094 million in 2022 to 4,570 million in 2023.

Non-financial State employment
Up to October, the State’s non-financial uses amounted to 242.97 billion, 0.2% lower than the figure recorded in the first ten months of 2022.
The item with the largest volume is transfers between public administrations, with a weight of 62.2% of total non-financial uses. Specifically, in the first ten months of the year they amounted to 151,076 million, 2% more than the previous year, mainly due to the additional allocation of 1,666 million destined to Autonomous Communities and Local Corporations to offset the overall negative balance of the 2020 settlement.

On the one hand, the Regional Administration received 86,172 million. Of the total transfers, 75,417 million correspond to the financing system, 10.9% more than in 2022, of which 67,080 million are deliveries on account and the rest corresponds to the effect on the final settlement expenditure of 2021.

In turn, the Social Security System has received 31,440 million, 2,639 million less than in 2022, mainly due to transfers linked to the Toledo Pact.

On the other hand, the Local Administration received 21,213 million, 2,407 million more than the previous year. Of the total transfers, 18,746 million corresponds to its share in State revenues, 5.8% more than in the previous year. Of the latter amount, 18,052 million are payments on account and the remainder is related to the effect on expenditure of the final settlement of 2021.

Employee remuneration grew by 4.3% to 16,971 million euros. Salaries for the month of October include the additional 0.5% increase provided for in the General Budget Law for 2023, to compensate for the loss of purchasing power due to inflation, with retroactive application as from January, and places the salary increase for the year at 3%.

Intermediate consumption amounted to 5,160 million, 9.2% more than in the same period of 2022. Interest accrued increased by 5.6% to 23,707 million. Social benefits other than social transfers increased by 12.5%, a figure that incorporates an 8.5% revaluation of contributory pensions for the year 2023. Recipients of non-contributory pensions maintain the 15% increase in their benefits throughout 2023, which had already been applied to them since July 2022.

Expenditure on subsidies for production and products amounted to 5,294 million, including in this fiscal year various transport subsidies, as well as the financing of the TUR (last resort tariff) for natural gas, among others.

In turn, current international cooperation totaled 984 million, of which 108 million corresponded to the contribution to the European Development Fund (EDF) and 244 million from vaccines donated to third countries, while the contribution to the EU from own resources based on VAT and GNI amounted to 9,181 million.

Finally, gross fixed capital formation stands at 5,485 million, while investment aid and other capital transfers together total 3,274 million, of which 2,853 million are investment aid, which has increased by 1,363 million.

Joint deficit of the Central Administration, Autonomous Communities and Social Security (September)
In September 2023, the combined deficit of the Central Administration, the Social Security Funds and the Autonomous Communities, excluding financial aid, stood at 22,448 million, equivalent to 1.54% of GDP, down from 1.68% in the same period of the previous year. Including the balance of aid to financial institutions, the deficit stood at 1.56% of GDP, compared to 1.76% the previous year.

Central government
The Central Government deficit stood at 23,211 million at the end of September 2023, 1.59% of GDP.

The State deficit in September, in terms of GDP, is equivalent to 1.82%, reaching 26,616 million.
Central Government Agencies recorded a surplus of 3,405 million in September 2023.