Catalonia registered a 1.06% deficit by the end of August, in line with the 1.58% target for the entire year

Barcelona (ACN).- During the first two thirds of the year, the Catalan Government posted a deficit of €2.05 billion, equivalent to 1.06% of Catalonia’s GDP, according to data released on Tuesday by the Spanish Ministry of Finance. The figure corresponds to 67% of the 1.58% deficit target imposed by the Spanish Government to the Catalan Executive for the whole year 2013. Meanwhile, the entire Spanish public sector posted a deficit corresponding to 5.07% of Spain’s GDP in the same period, although data from municipalities is still pending to be included. However, the Spanish Government does not expect any changes with the inclusion of this data, since municipalities ended 2012 with a global budget surplus of €3 billion and this year they are working with a 0.0% deficit target. The 5.07% figure already represents 78% of the total 6.5% deficit target that the European Union allowed Spain for the entire year. However, if the bailouts to the banking sector had not been included, Spain’s total deficit would have amounted to 4.80% by the end of August, instead of 5.07%. Furthermore, the Spanish Government announced that its own deficit reached 4%, representing 77% of the deficit allowed for the entire year; 3.82% corresponded to Spanish Government departments and agencies and 0.18% to the Social Security, which is directly managed by the Spanish Executive. Altogether, the Spanish Autonomous Communities registered a 0.79% deficit between January and August, 61% of the total 1.3% deficit allowed for the year.

The Spanish Deputy Minister for Budget, Marta Fernández Currás, explained the deficits posted by each level of government in Spain during the first 8 months of 2013, that is to say during the first two thirds of the year. All the levels of government combined have to post a 6.5% public deficit by the end of December, which is the deficit target set by the European Union for Spain. The Spanish Government split this deficit following its own criteria and decided to allow itself a 5.2% deficit. The figure represents 80% of the flexibility allowed by Brussels, despite the Spanish Government managing around 50% of Spain’s public spending. The other levels of government would have to deal with the rest. The Spanish Executive decided that municipalities would be obliged to post a 0.0% deficit this year and that the Autonomous Communities would have different deficit targets, but altogether they would post an average deficit of 1.3%. After the new Spanish criteria, the Catalan Government was allowed a 1.58% deficit target for the entire year.

By the end of the first two thirds of 2013, the Catalan Executive had a deficit representing 67% of that the deficit allowed for the entire year. Since Catalonia is the richest Autonomous Community in Spain and its Autonomous Government has the highest budget, it was not strange that the Catalan Government posted the highest deficit in absolute terms, with €2.05 billion. This represents 1.06% of Catalonia’s GDP.

“The great effort for fiscal consolidation” of the Autonomous Communities

Curràs praised “the great effort for fiscal consolidation” that the Autonomous Communities are currently undertaking. She emphasised that the situation is “significantly better” than it was last year and that they “are in line” with meeting the deficit targets set for 2013.

Some Autonomous Communities have even posted a budget surplus. It is the case of the small regions of Asturias (0.34%), Balearic Islands (0.29%) and La Rioja (0.04%). In addition, Canarias was very close to reaching budget stability, posting a 0.11% deficit. On the other side there are Navarra and Murcia, which posted a 2.55% and a 1.43% deficit respectively. The Region of Madrid posted a deficit of 0.91%; Valencia (also called the Valencian Country), of 0.76%; Andalusia, of 0.75%; and, the Basque Country, of 0.69%, among others.