The public deficit increases 3.9% between January and August due to the rise in expenses

Madrid, Oct 30 (EFE).- The deficit of all public administrations -except local corporations- amounted to 29,930 million euros in the first eight months of the year, 3.9% more than in the same period of 2022 , due to increased expenses.

Despite this, the growth of the economy has allowed the deficit to GDP ratio to be reduced by almost one tenth, to 2.05% of GDP, according to budget execution data published this Monday by the Ministry of Finance.

In the first eight months of the year, public expenditure increased by 25,441 million - driven by social benefits, intermediate consumption, remuneration of employees and debt interest -, while income only increased by 24,314 million - thanks, above all, to the highest tax collection.

As usual, most of the deficit was concentrated in the central administration, with 32,845 million, 36.2% more and 2.25% of GDP, due to the impact of the final liquidation of the regional financing system in 2021 and , to a lesser extent, to higher spending on pensions.

The liquidation of the system also impacted the accounts of the regional administration, although in the opposite direction, allowing them to register a surplus of 496 million (0.03% of GDP), compared to the 2022 deficit.

Only five autonomous communities registered a deficit at the end of August: Castilla-La Mancha, Catalonia, Madrid, Murcia and Valencia.

Social Security also changed the deficit into a surplus, in this case of 2,419 million (0.17% of GDP), due to the lower spending associated with covid and the improvement in social contributions.

The Treasury has also advanced the State's budget execution data until the month of September, a nine-month period in which it accumulated a deficit of 26,022 million euros, 39.8% more and 1.78% of GDP.

The Treasury explains that behind this rebound is the accounting effect of the final settlement of the regional and local financing systems for 2021, carried out this year and with a negative effect for the State of 11,798 million, which contrasts with the positive settlement of the year. former.

This factor affects both expenses and income, which decreased by 0.6%, to 193,796 million, despite the fact that tax collection grew by 3.1% in that period, to 161,111 million.

Personal income tax collected 3.5% less - due to the effect of the regional liquidation - and VAT, 1.2% less, due to the discounts applied to food and energy, while corporate tax collected 11.1%. % more, thanks to both the greater benefits of the groups and the new system for calculating the tax base.

The collection also includes 3,528 million from new taxes on banking, energy and large fortunes and 364 million from the new tax on non-reusable plastic packaging.

State expenses rose between January and August to 219,818 million euros, 2.9% more, largely due to the effect of regional and local settlements, which increased the resources dedicated to transfers by 6.7%.

Expenditures on intermediate consumption also increased (14.1%, partly due to electoral costs), remuneration of employees (3.7%, due to salary increases) and interest on debt (3.4%). %). EFE

mpca/sgb