Spain’s State Deficit Stands At 1.84% Of GDP Versus 2.85% Year Ago

 

Spain’s Ministry of the Treasury and Public Function has published on its website the State budget execution figures for August, equivalent to 1.84% of GDP stated in national accounting terms, a drop of 32.6% year-on year.

The consolidated deficit of the Central Government, regional governments, and Social Security system has also been published for the period January-July, which amounts to 2.31% of GDP, excluding financial aid.

Finally, the budget execution figures for local authorities for the second quarter of 2017 have been published, showing a surplus of 1.87 billion euros to June, an increase of 60.3% on the same period of last year.

In the period January-August, the State posted a deficit of 21.5 billion euros, equivalent to 1.84% of GDP, 1.01 points lower than for the same period of last year, when the deficit stood at 2.85% of GDP. This is the result of a 5% year-on-year increase in revenue and a 3.6% drop in expenditure in the period January-August.

The State’s primary deficit, which excludes interest expense, stood at 0.32% of GDP, with a drop of 71% to August.

At month-end August, non-financial State revenue totalled 113.07 billion euros, compared with the 107.71 billion recorded in the same period of 2016.

Revenue from taxes and social contributions amounted to 103.19 billion euros, up by 6.7% on the same period of last year. Current taxes on income and property increased significantly by 11.5% to 36.95 billion euros, mainly due to increased revenue from the first advance payment of corporate income tax on the back of the regulatory changes introduced in 2016.

Personal income tax accruals were up by 2.2% to 20.64 billion euros, partly offset by the effect of the final tax settlement for 2015, paid out in July, which resulted in higher payments to the regional governments (640 million euros) compared with the settlement for 2014.

Taxes on production and imports are up by 4.8% to 61.2 billion euros, largely due to the performance of VAT revenue, up by 5.8% to month-end August on the same period of last year.

Among the poorer performing items was property income, down by 11.6% due to a 584-million euro drop in Bank of Spain profits, partly offset by an increase in dividends from Enaire in the amount of 292 million euros, compared with the figure of 207 million in 2016.

Non-financial State expenditure to August is down by 3.6% year-on-year to 134.58 billion euros.

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