In this way, the Lower Chamber endorses the proposal of the Ministry of Finance to adapt these parameters to the economic reality of Spain and also supports a more passable path, which allows reducing the deficit and public debt without jeopardizing growth and creation of employment. Now, the parliamentary process will continue in the Senate.
The Minister of Finance, María Jesús Montero, defended during her speech at the Plenary Session of the Congress that the new stability objectives lay the foundations for the elaboration of the General State Budget of 2020. Public accounts that will include the Government's commitments to strengthen the welfare state and recover rights, while respecting the EU tax rules.
Montero has indicated that it is a "realistic and credible" path that will make it possible to combine fiscal consolidation with the Government's commitment to strengthen public policies and essential services so as not to leave anyone behind.
Specifically, the Agreement approved by the Minister council On February 11 that Congress has ratified today establishes a deficit target for all Public Administrations of 1.8% of GDP in 2020.
For the Central Administration, the limit is 0.5%; for the Autonomous Communities it is set at 0.2%; for Social Security at 1.1% and budget balance for local entities.
In this way, the largest fiscal effort will be made by the Central Administration, which should reduce its deficit from 1.32% recorded in 2018, to 0.5%. That is, a decrease of eight tenths in two exercises. Social Security has to reduce its deficit from 1.44% to 1.1%, which means a reduction of three tenths. Finally, the effort required of the Autonomous Communities is smaller and it is enough to reduce their deficit by one tenth.
On the other hand, the path approved for the 2021-2023 period sets a deficit for the Public Administration group of 1.5% in 2021; 1.2% in 2022; and 0.9% in 2023.
The breakdown by subsectors sets the Central Administration to reduce its deficit progressively to 0.1% in 2023. The Autonomous Communities will reduce their deficit one tenth each year until reaching equilibrium in 2022 and 2023.
For the Local Entities budget balance is contemplated during the entire period 2021-2023. And Social Security will more moderately reduce its deficit to 0.8% of GDP in 2023.
Public debt and spending rule
Likewise, the 2020 public debt objective for all Public Administrations is set at 94.6% and will be reduced to below 90% (89.8%) in 2023.
In this regard, the Minister of Finance has valued that Spain has closed 2019 with a reduction in public debt of more than two points, which is the fastest rate of decline since 2007. This has allowed us to meet the objective of 95, 9% and place the ratio at 95.5% of GDP, which is the lowest figure since 2012.
Finally, the agreement ratified today by Congress contemplates the rate of variation for the purpose of compliance with the spending rule that will be 2.9% in 2020 and will increase to reach 3.3% in 2023.
