Spain sends its budget plan to Brussels with a deficit target of 3% by 2024

MADRID, 14 Oct.

Spain sends its budget plan to Brussels with a deficit target of 3% by 2024


Tomorrow, Sunday, the Government will send the 2024 Budget Plan to the European Commission, where it is expected to include a deficit forecast of around 3% for next year and a public debt ratio below 110% of GDP for now. 2023.

Like every October 15, the Government will send this report to the Commission in compliance with community standards. The text destined for Brussels includes both the forecasts of the macroeconomic situation, as well as the evolution of the country's public finances and the draft General State Budgets (PGE).

Typically, the Budget Plan is sent once the processing of the General State Budgets has begun, as happened last year.

But this last point is still pending to be resolved due to the political panorama and more specifically to form a Government. In the event that Pedro Sánchez reaches the votes to be president, the intention of the acting Minister of Finance, María Jesús Montero, is to accelerate the negotiations to be able to approve next year's public accounts in January 2024.

In the absence of knowing the details of the document that will be delivered on Sunday, it is worth noting that last year's plan included for the first time two possible scenarios of income and expenses due to the war in Ukraine and its economic impact, especially on prices. of some raw materials and energy.

In this way, the 2023 plan included a scenario with total income of all Public Administrations of 587,609 million euros (42.3% of GDP), while taxes stood at 344,627 million. The other scenario was more ambitious and included total income of 597,265 million euros and taxes worth 354,283 million euros.

Regarding the macroeconomic scenario, the Ministry of Economic Affairs has confirmed to Europa Press that there will be modifications, although they have not specified in what direction these changes will be. What is not going to change, of course, is the Government's economic policy included in the plan because it is in office, as advanced by the first vice president and acting minister of Economic Affairs and Digital Transformation, Nadia Calviño.

The department led by Calviño has confirmed that the deficit objective included in the Stability Program last April is maintained. Specifically, it projected a path of 3.9% in 2023; 3% in 2024; 2.7% in 2025; and 2.5% in 2026. In that report the Government also projected that public debt would fall below 110% of GDP this same year.

In this Stability Program, the Executive also aimed at a growth of 2.1% of GDP for 2023 and 2.4% in 2024. This same week the International Monetary Fund (IMF) maintained its growth forecast of 2.5% for this year, but reduced the 2024 increase to 1.7%.

In fact, the Government's forecast of 2.1% for this year is below the market consensus (between 2.3% and 2.4%) but, on the other hand, that of 2024 has already been well above than estimated by national and international analysts (between 1.5% and 1.8%), who are lowering their forecasts due to the rise in rates, the rise in energy prices and the greater sluggishness among the main world economies.