Thus, the state deficit for the month of May stands at 2.88% of GDP, in terms of national accounting. The Ministry has also released the consolidated deficit of the Central Administration, Autonomous Communities and Social Security for April, which stands at 2.14% of GDP, excluding financial aid. However, it is worth noting the good performance of the communities, which register a surplus of 0.02% thanks to the resources transferred by the Government.

Likewise, the budget execution data of the set of Public Administrations has been published today, including for the first time this year the execution data of the Local Corporations. In this way, the deficit of all Public Administrations in the first quarter reached 0.82% of GDP. In the data corresponding to the first three months of the year for all Public Administrations, the impact caused by the health crisis is already reflected.

State deficit (May)

In the first five months of the year the State has registered a deficit of 32,251 million euros, which is equivalent to 2.88% of GDP. This behavior is due to the drop in activity due to the confinement necessary to combat the pandemic, which has caused a decrease in resources of 10.6%. Likewise, the measures adopted by the Government to mitigate the social, economic and labor effects of the crisis lead to an increase in expenses of 10.8% until May.

As in previous months, this evolution must take into account that the State's operations are framed in an extraordinary context due to the health emergency caused by COVID-19, which has been reflected in an increase in health benefit programs. and pharmacy and an increase in current transfers to Social Security and Autonomous Communities.

Likewise, as indicated in previous publications, since January 1, 2020 there has been a non-recurring reversal operation of the toll motorways in 2020 (AP4 and AP7), amounting to 1,745 million, which will affect to the total volume of income and expenses of the State throughout the year, but that will not have an impact on the deficit.

State non-financial resources

Non-financial resources have amounted to 63,950 million, representing a decrease of 10.6% compared to 2019.

The income corresponding to the month of May is affected, like last month, by the stoppage of almost all activity as a consequence of the health emergency caused by COVID-19.

Tax resources, which represent 80.1% of the total, represent 50,247 million, which implies a decrease of 14.2%. Virtually all tax figures fall. On the one hand, the decrease of 10.7% in taxes on production and imports stands out, among which VAT falls by 13.9%, to 25,721 million. Current taxes on income and wealth decreased by 21.6%. Thus, the Corporate Tax falls by 6.7% and the Personal Income Tax by 31.5%. Taxes on capital also drop by 28% and social contributions by 2%.

The rest of the resources follow the same downward trend, with a fall in property income of 26% (including the decrease in dividends from the Bank of Spain), as well as interest rates that decrease by 16.7%.

Lastly, among the resources that increased, like last month, it is worth noting current and capital transfers between Public Administrations, which grew by 2.9%, mainly due to higher income from the Financing System.

Non-financial state jobs

Until May, non-financial jobs amounted to 95,017 million, registering an increase of 10.8% compared to the same month of 2019. This evolution again derives from the extraordinary situation caused by COVID-19.

Intermediate consumption grew by 31.1% as a result of the expenditure of 926 million derived from the SNS health and pharmacy benefits budget program related to the COVID-19, without correspondence in 2019. In addition, the remuneration of employees has increased by 0.9 % due, on the one hand, to the salary equalization of the Police and Civil Guard with the autonomous bodies and to the remuneration increase corresponding to 2020 of 2% compared to 2.25% in 2019.

Current transfers to other administrations is one of the items that increases the most. It reaches 54,958 million, 14.6% more than the previous year. The highest amount corresponded to the autonomous communities, which until May have received transfers amounting to 37,088 million, a figure that represents 5,967 million more than the previous year. The Government's decision to update the installments on account and advance the settlement of 2018 explains that the autonomous communities have registered such a notable increase in resources.

Social transfers in kind grow to 169 million. Social benefits other than social transfers in kind increased by 2.8%, a figure that reflects the update of pensions for passive classes of 0.9%.

Also noteworthy is the increase in investment, an increase that is mainly explained by the reversal of toll motorways in 2020 (AP4 and AP7), amounting to 1,745 million, and the increase in the EU's own resources, which are growing by 9.5% until May.

As in April, these increases were offset, maintaining the trend of the previous months, in part, due to a decrease of 10.5% in interest, from 19.3% in current international cooperation.

Finally, investment aid and other capital transfers also decreased, by 85.1% as a result of the return of the maternity and paternity benefit tax in 2019 for the amount of 723 million, and without correspondence in 2020.

Joint deficit of the Central Administration, Autonomous Communities and Social Security (April)

In the first four-month period of 2020, the deficit of the Central Administration, the Autonomous Communities and the Security Funds stood at 23,997 million. In terms of GDP, this figure is equivalent to 2.14%.

If the balance of aid to financial institutions is included, the deficit would be 24,043 million euros, equivalent to 2.15% of GDP. This is an increase of 17,300 million, of which 8,866 million are due to COVID expenses.

Central administration

The Central Administration in April registered a deficit of 19,866 million, 1.78% of GDP. The consolidated expenditure of the Central Administration associated with COVID-19, in the first four-month period of 2020, amounts to 992 million.

– The State deficit is equivalent to 1.78% of GDP, which represents 19,885 million euros.

– The Central Administration Organizations register a surplus of 19 million, compared to the deficit of 217 million in the same period of the previous year.

Autonomous communities

The regional administration has registered a surplus of 231 million until April, compared to the deficit of 2,714 million in the same period of the previous year. Thus, the Autonomous Communities together recorded a surplus of 0.02%, which contrasts with the deficit of 0.22% last year. In fact, 13 communities registered a surplus in April, compared to the five that did so in the same month last year.

Specifically, revenues have increased 12.3%. It is worth noting the 8.4% increase in tax revenues, especially income and equity flows, which grew by 20.3%, and the increase registered in transfers received from other Public Administrations by 18.9% .

This positive behavior of the Autonomous Communities shows that the measures adopted by the Government to alleviate the emergency situation in the Autonomous Communities and provide them with liquidity have been effective.

In this sense, the advance of resources for this subsector of 6,218 million, without correspondence in the same period of 2019, stands out. It is the actual update of the payments on account between March and April, which was carried out for the first time without having a General Budgets project; the advance of up to 50% of the final settlement of 2018; the advancement of the execution of the resources of the State Housing Plan, as well as the specific financing that arose after COVID-19 (303 million from the Extraordinary Fund for Basic Social Services and 300 million from the Health and Pharmacy Benefits Program).

On the other hand, taxes on production and imports fall by 20.6%. The decrease in collection has been almost general in all taxes included in this heading, highlighting the 15.8% drop in ITP and AJD. In the month of April alone, 583 million tax revenues were lost as a result of the crisis.

Within non-financial expenses, which increased by 6.5%, intermediate consumption grew by 10.6%, due to the increase in hospital pharmaceutical spending and in spending on medical products without a prescription or dispensing order, strongly conditioned by COVID -19. The remuneration of employees increased by 5.1%, corresponding 289 to the increase registered in healthcare, 12.5% ​​higher than that registered in April 2019.

On the other hand, social transfers in kind grew by 6.2%, highlighting the 11.9% increase in spending on health care concerts and 5.6% of spending on pharmacy. Subsidies rise by 6.8% and social benefits by 10.5%. Lastly, investment increases 3.1% and transfers between public administrations rise 9.6%. To date, the only expense that falls, as in the month of March, is interest, which fell by 12.7%.

Except for four communities, the rest have a surplus until April, and 13 territories have improved their budgetary result compared to the same month the previous year.

If the effect of advances granted on account of the financing system is discounted in both periods, revenue would grow 8.0% (4,203 million more) and expenses 6.5% (3,637 million). Of this amount, with the information transmitted by the Autonomous Communities there are 2,238 million corresponding to healthcare expenditure derived from COVID-19, as shown in the following table:

Social security funds

The Social Security Funds have obtained a deficit of 0.39% of GDP, compared to the surplus of 0.30% registered in April 2019. The income and expenditure figures for April are notably affected by the impact of the pandemic . Resources grew slightly 0.4% compared to non-financial expenses, which increased 15.7%, of which social benefits grew by 7,176 million compared to the same period in 2019.

This evolution is affected by the various measures adopted in the Royal Decrees approved to combat the effects of COVID-19. Measures that protect both the self-employed stand out, with the establishment of an extraordinary benefit for cessation of activity or for a reduction in turnover, as well as workers employed by others who in the event of suspension of contracts and reduction of working hours due to force majeure temporary (ERTES) are recognized the contributory unemployment benefit while this situation lasts. In both cases, the exoneration of social contributions is established, to the company in the payment of the business contribution and of the quotas for joint collection concepts, and to the self-employed in their monthly quotas.

Spending on social benefits has increased in April by 4,564 million compared to the same period in 2019, of which 3,000 million correspond to ERTES and 1,100 million to the extraordinary benefit for cessation of self-employed activity. Also noteworthy is the expenditure on subsidies, which grew by 1,159 million compared to 2019 due to quota exemptions.

The Social Security System registers a deficit of 821 million due to the increase in spending on social benefits by 6.9% (most of it corresponding to spending on pensions that have increased by 0.9% this year), while income by social contributions they grow only 0.1%.

The State Public Employment Service has obtained a deficit of 3,576 million due to the increase in spending on unemployment benefits, which have increased by 3,457 million compared to 2019. For its part, resources fell by 12.9%.

Finally, FOGASA records a surplus of 35 million euros.

Joint deficit of public administrations (March)

Lastly, the Ministry of Finance has also published today the first 2020 data on the execution of Local Corporations, corresponding to the first quarter of the year. In this period, they have registered a deficit of 493 million, which is equivalent to 0.04% of GDP.

With these data from Local Corporations, the deficit of the set of Public Administrations in the first quarter of the year stood at 0.82% of GDP, compared to 0.33% the previous year.

Expenses have grown 5.5%, compared to a 1.1% increase in income. From the increase in spending, around 1,832 million would correspond, until March, to the consolidated expenditure derived from COVID-19.

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