- The spending ceiling is reduced by 6.6%, after excluding the payment of interest on the debt and contributions to Social Security
- The maximum deficit target for all Public Administrations is set at 4.5% of GDP for 2013. The State target is set at 3.8%, the Autonomous Communities at 0.7% and the Corporations Local and Social Security in the budget balance
- Also approved the revision of the economic table 2012-2015
The Council of Ministers has approved the budget stability objective for next year, as well as the limit for non-financial spending by the State for that year. In this way, what is established by the General Budget Stability Law is faithfully followed, which gives the Government the fixation of these two variables with which the process of preparing the General State Budgets begins.
The Government continues with its effort to reduce the deficit and meet European commitments, as well as making progress in laying the foundations for balanced economic growth. A good example of this is the significant effort to reduce spending by the different Ministries, which will experience a 12.2% reduction.
After the deviation in the deficit target of 2011, which ended at 8.9% of GDP compared to 6% on the path of fiscal consolidation and a public deficit set for this year of 6.3%, the Government In the face of this new recession situation, it is necessary to approve a new deficit target for all Public Administrations.
It is established that in 2013 the new maximum deficit target will be 4.5% of GDP. The deficit of the Central Administration is set at 3.8% of GDP, that of the Autonomous Communities at 0.7%, while Local Corporations and Social Security will close next year with zero deficit.
For 2014 the maximum deficit for all Public Administrations is set at 2.8% of GDP, a negative balance equivalent to 2.7% of GDP will correspond to the State, to the Autonomous Communities, 0.1%, while that Local Corporations and Social Security will maintain the budget balance, the same that will happen in 2015.
Already in 2015 the Central Administration will reduce its deficit balance to 2.1% of GDP, while the Autonomous Communities will register a surplus equivalent to 0.2% of GDP, with which the aggregate total balance will be a deficit of 1, 9%.
Spending ceiling
Along with this objective of budgetary stability, the Government has also submitted to Parliament the non-financial spending limit of the State for 2013. In a major effort to reduce spending, the Executive has approved a 12.2% reduction in the spending available for the Ministries, with which they will have a total of 31,057 million euros.
The non-financial expenditure limit of the State, once interest and the contribution to Social Security are excluded, decreases 6.6% to 73,255 million euros.
With the inclusion of these items, the spending ceiling is set at 126,792 million euros, which represents an increase of 9.2%, as a result of the significant effort that must be made to meet the payment of interest on the debt. which increases by 9,114 million euros, as well as an increase of 6,683 million euros in the contribution to Social Security.
The forecast for non-financial income of the State for 2013 amounts to 124,045 million euros and financing to the Territorial Administrations through the expense budget of 35,314 million euros. The National Accounts adjustments amount to -2,717 million euros, which means less spending capacity in the State budget for this amount.
With this setting of the spending ceiling, the process of preparing the General State Budgets for 2013 begins.
Two-tenths improvement
Today, the Council of Ministers also approved the revision of the 2012-2015 macroeconomic table to support the new spending ceiling. In the new forecasts, 2012 appears as the worst of the current crisis, especially in terms of growth and employment. From there, there is a slight acceleration that will allow the Spanish economy to recover the growth path in 2014.
The recent labor reform will improve the relationship between growth and employment. At the same time, the process of consolidating the financial sector, containing the public deficit, economic liberalization measures and improving the position vis-à-vis the exterior will lay the foundations for a more solid and sustainable growth model.
For the current year, the GDP growth forecast improves two tenths, up to -1.5% compared to the previous estimate. The improvement responds, above all, to the revision of the deficit target agreed by Ecofin on July 10, up to 6.3% of GDP compared to 5.3% previously. Next year, the annual growth rate is revised, on the contrary, downwards, to -0.5%. This data is compatible with an acceleration profile in the second part of the year, with positive quarterly growth rates.
The recovery in employment will continue at this rate and will allow the unemployment rate to drop to 21.8% in 2015.
