Spain's Public Deficit Decreases to 2.8% of GDP for 2024
The reduction is attributed to improved public accounts despite challenges from natural disasters and judicial rulings.
Spain's public deficit for 2024 has been reported at 2.8% of Gross Domestic Product (GDP), marking a decrease of seven-tenths of a percentage point from the previous year’s 3.5%.
The figure falls below the government’s own forecasts, which had anticipated a deficit of 3% of GDP. María Jesús Montero, the First Vice President of the Government and Minister of Finance, highlighted this development in a press conference, attributing the reduction to positive trends in revenue collection across public administrations.
In absolute terms, the public deficit has declined from 52.669 billion euros in 2023 to 44.587 billion euros in 2024. However, these figures do not factor in budgetary impacts resulting from the measures taken to address the effects of the natural disaster caused by the DANA (DANA is the Spanish abbreviation for ‘Deducción Automática de Niveles Adecuados’), which occurred last year.
Including these costs, the deficit would have risen to 3.15% of GDP, with Montero estimating the budgetary impact of these disaster-related expenditures to be around 5.590 billion euros or approximately 0.35% of GDP.
Montero noted that Spain has achieved its deficit reduction target for the fifth consecutive year.
She emphasized that the performance exceeded expectations set by the European Commission.
The public revenues increased significantly, with tax receipts amounting to 294.734 billion euros in 2024, reflecting an 8.4% increase compared to 2023. Among the taxes, the Personal Income Tax (IRPF) contributed notably, rising 7.6%, while Corporate Tax revenues saw an increase of 11.5%, attributed to growth in business profits.
Overall, Spain’s total public revenues reached 672.659 billion euros, a rise of 7.1% from the previous year.
In contrast, public spending escalated to 722.846 billion euros, an increase of 7.3% year-on-year.
The bulk of the public deficit was primarily due to substantial transfers made by the state to autonomous communities, necessitated by a favorable tax settlement from 2022 when tax revenues significantly surpassed forecasts.
As a result, the autonomous deficit stood at a mere 0.1% of GDP, a substantial decrease from the 0.92% recorded in 2023. While many regions concluded the fiscal year with a surplus, six did not, with Montero indicating that four regions may not have adhered to spending rules.
Similarly, municipal accounts showed a notable improvement in budget surplus, although the Social Security deficit slightly reduced, remaining at 0.53% of GDP, despite a 7.1% increase in revenue from social contributions.
The figure falls below the government’s own forecasts, which had anticipated a deficit of 3% of GDP. María Jesús Montero, the First Vice President of the Government and Minister of Finance, highlighted this development in a press conference, attributing the reduction to positive trends in revenue collection across public administrations.
In absolute terms, the public deficit has declined from 52.669 billion euros in 2023 to 44.587 billion euros in 2024. However, these figures do not factor in budgetary impacts resulting from the measures taken to address the effects of the natural disaster caused by the DANA (DANA is the Spanish abbreviation for ‘Deducción Automática de Niveles Adecuados’), which occurred last year.
Including these costs, the deficit would have risen to 3.15% of GDP, with Montero estimating the budgetary impact of these disaster-related expenditures to be around 5.590 billion euros or approximately 0.35% of GDP.
Montero noted that Spain has achieved its deficit reduction target for the fifth consecutive year.
She emphasized that the performance exceeded expectations set by the European Commission.
The public revenues increased significantly, with tax receipts amounting to 294.734 billion euros in 2024, reflecting an 8.4% increase compared to 2023. Among the taxes, the Personal Income Tax (IRPF) contributed notably, rising 7.6%, while Corporate Tax revenues saw an increase of 11.5%, attributed to growth in business profits.
Overall, Spain’s total public revenues reached 672.659 billion euros, a rise of 7.1% from the previous year.
In contrast, public spending escalated to 722.846 billion euros, an increase of 7.3% year-on-year.
The bulk of the public deficit was primarily due to substantial transfers made by the state to autonomous communities, necessitated by a favorable tax settlement from 2022 when tax revenues significantly surpassed forecasts.
As a result, the autonomous deficit stood at a mere 0.1% of GDP, a substantial decrease from the 0.92% recorded in 2023. While many regions concluded the fiscal year with a surplus, six did not, with Montero indicating that four regions may not have adhered to spending rules.
Similarly, municipal accounts showed a notable improvement in budget surplus, although the Social Security deficit slightly reduced, remaining at 0.53% of GDP, despite a 7.1% increase in revenue from social contributions.
Translation:
Translated by AI
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