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HomeLatest NewsThe strong increase in collection until May relaxes the public deficit

The strong increase in collection until May relaxes the public deficit

Date: October 2, 2023 Time: 07:22:57

The public deficit closed May at 17,414 million euros, a figure that is equivalent to 1.24% of GDP and that is 17.8% lower than that of the first five months of 2022, according to data distributed this Monday by the Ministry of the Treasury and that Efe collects. The budgeted execution data of the public administrations as a whole -except for local corporations- up to May show a correction that is produced thanks to the strong increase in income, of 9.7%, and despite the fact that expenses grew by 7%.

The central administration accumulated a deficit of 10,373 million (0.74% of GDP) at the end of May, 40.3% less than in 2022 thanks to tax collection, which has been boosted by the implementation of new taxes on packaging plastic, banks and energy. On the other hand, the autonomous communities doubled their deficit, reaching 6,193 million (0.44% of GDP), due to the accounting effect derived from the transfer of more than 3,000 million made by the State in 2022 to compensate the regions for the change in the VAT system in 2017.

At the end of May, only Asturias and the Basque Country showed a surplus -of 0.14% and 0.05% of their GDP, respectively-, while the largest deficit was concentrated in the Balearic Islands (1.52% of their GDP) and Valencia (1.32%). Regarding Social Security funds, it reduced the deficit by 25.5%, to place it at 848 million (0.06% of GDP) thanks to the increase in income from social contributions.

The State deficit is reduced by 6.6%

The Treasury has also advanced the data for the execution of the State budget until June, a period in which the deficit of this subsector stood at 24,090 million euros, 6.6% less than in the first half of 2022 and equivalent to 1 .7% of GDP. This correction has occurred thanks to the fact that the increase in income -122,192 million, 7.9% more- was more intense than that of expenses -146,282 million, 5.2% more-.

The good growth in revenue was produced by the progress of tax collection -101,692 million, 5.5% more-, driven by the new ones on single-use plastics, banking and energy (which contributed 1,685 million) and the Modification of the fiscal consolidation system in corporate tax (which amounts to 232 million). This factor, together with the increase in corporate profits, boosted corporate tax collection by 14.4%, while personal income tax revenues grew by 6.1% and VAT revenues remained stable.

On the expense side, transfers between public administrations increased by 9.5%, due both to the greater resources delivered to Social Security and to the allocation to the autonomous communities to offset the negative balance of 2020. Consumer spending also increased intermediate (by 16%, mainly due to the 425 million from the elections and political parties program), interests (by 1.5%) and the remuneration of employees (by 3.6%).

The increase in prices leaves a surplus of 14 million

The Social Security accounts presented, as of June 30, 2023, a positive balance of 14,007 million euros, equivalent to 1% of the Gross Domestic Product (GDP), according to data published this Monday by the Ministry of Inclusion, Social Security and Migrations. As explained by the Ministry, this figure is obtained from the difference between recognized rights for non-financial operations of 104,244 million euros, which show an increase of 11.5%, and recognized obligations of 90,237 million, which grow by 8.7 % YoY.

In terms of cash, the liquid collection of the system reached 103,050 million euros, with an increase of 11.5% compared to the previous year, while payments presented an increase of 8.4%, reaching 89,893 million euros. . Income from Social Security contributions will increase and in this first half of the year they will register an increase of 10% year-on-year, reaching 75,942 million euros. If the data from the last financial year that was not affected by the pandemic, 2019, is taken as a reference, the increase in prices is 23.9% (14,646 million euros more).

In this way, income from social contributions continues to mark all-time highs in absolute terms and also registers the largest increase in the last 16 years in the first six months of the year. If the income corresponding to the Intergenerational Equity Mechanism, in force since January 1, is discounted, the increase in social contributions would be 8.2% year-on-year.

This behavior of the contributions is driven by the evolution of the employed contributions, which experienced a year-on-year increase of 10%, reaching 71,338 million euros (6,506 million euros more), due to the good behavior of employment in the first semester of the year In addition, unemployment contributions are estimated at 4,604 million euros, which represents an increase of 9.1% (385 million euros more)

Transfers received by Social Security increased to 27,657 million euros, with an increase of 15.9% year-on-year. The most significant item is the corresponding transfers received from the State and Autonomous Bodies, which add up to a total of 25,444 million (17.6%).

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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