Publication of public deficit figures
The consolidated deficit for public authorities excluding local authorities shrank to 0.50% of GDP in the first quarter
News - 2017.5.30
Today the Ministry of the Treasury and Public Function published on its website the figures relating to the consolidated deficit of the Central Government, Regional Governments and Social Security for the first quarter of the year, stated in national accounting terms, together with State deficit figures up to and including the month of April.
State deficit (April)
In the first four months of the year, the State posted a deficit of 8.27 billion euros, equivalent to 0.71% of GDP, below the deficit of 1.27% posted in the same period the previous year.
Non-financial State revenue
In the first four months of the year, non-financial State revenue amounted to 55.33 billion euros versus the 52.53 billion posted in the same period 2016, an increase of 5.3%.
Fiscal revenues, taxes and social contributions amount to 51.79 billion euros, 7.1% more than in the same period of the previous year. Current taxes on income and assects grew by 17.7% in the first four months to 17.35 billion, mainly due to the increase of revenue from the first fractional payment of corporate income tax stemming from Royal Decree-Law 2/2016 and Royal Decree-Law 3/2016, in force since October and December of the previous year, respectively. Meanwhile taxes on production and imports grew by 2.8% to 32.10 billion, mainly due to the performance of VAT revenue, up by 4% compared with the first four months of 2016.
With regard to other non-tax revenue we should mention property income which decreased by 33.6%, mainly due to falling dividends from the Bank of Spain, down from 1.04 billion euros in 2016 to 516 million in 2017. Conversely, interest income grew by 13.8%, mainly due to the recovery of interest rates applicable to extraordinary funding mechanisms since 2016.
Non-financial State expenditure
Non-financial State expenditure to April is down by 4.7% year-on-year to 63.59 billion euros.
There has been a general downward trend in the main expenditure items, with a 4.8% drop in current expenditure compared with the first four months of 2016. The reduction in expenditure was due to a great extent to the drecrease in current transfers between public authorities, which totalled 36.20 billion euros, 4.4% less than the previous year. Firstly, thanks to the favourable performance of the job market, transfers made to the State Public Employment Service to finance unemployment benefits were down by 1.09 billion euros to April, an 83% drop. Secondly, transfers to Central Government bodies also fell, by 30%, as did transfers to Regional Governments, down by 1.2%, mainly due to net prepayments from the system. Conversely, transfers to local authorities increased by 0.4%.
Employee remuneration expense also fell by 1%, while spending on intermediate consumption dropped by 1.4%, and accrued interest shrank by 8.4%. Contributions to the European Union budget also decreased by 22.6% compared with the previous year.
Among the current expenditure items that have increased are social benefits other than social transfers in kind, which grew by 2.3%, mainly due to rising civil service pensions, up by 3.9% compared with the same period 2016.
Other current expenditure grew by 26.5% due to increased spending to cover the electricity deficit. The amount to April was one billion euros versus the 771 million of the first four months of 2016.
With regard to capital expenditure, gross capital formation totalled 1.45 billion euros, 3.4% more than in 2016, while investment subsidies and other capital transfers grew by 61.3% to April as a result of contributions made to the ADIF-high speed train programme in the amount of 187 million, with no corresponding amount in 2016.
Combined deficit of the Central Government, Regional Governments, and Social Security (March)
The consolidated deficit of the public authorities, excluding local authorities, was 5.98 billion in the first quarter of the year. Excluding the net balance of aid to financial institutions, with a negative balance of 213 million at the end of March, the consolidated deficit of these three subsectors is 5.76 billion. In GDP terms the deficit is equivalent to 0.50%, 0.49 percentage points lower than the deficit posted in the previous month and also lower than the 0.77% deficit reported in the first quarter of 2016.
Central Government
The Central Government posted a deficit of 5.73 billion to month-end March, excluding aid to financial institutions, which represents a year-on-year reduction of 37.8%. In GDP terms the Central Government's deficit is equivalent to 0.49% of GDP, below the 0.83% posted in the same period of 2016.
The balance of the Central Government includes the balance of the State together with the balance of Central Government bodies:
- The State deficit to March shrank by 41.8% year-on-year to 5.86 billion euros (0.50% of GDP).
- As at month-end March Central Government bodies showed a deficit of 85 million euros, equivalent to 0.01% of GDP. This result is mainly due to a 14.2% decrease in revenues and, to a lesser extent, to a 5.9% increase in expenditure. This expenditure includes compensation paid out by BFA to holders of hybrids and to minority shareholders of Bankia in the amount of 310 million, versus the 108 million in the same period the previous year.
Social security funds
Social Security funds posted a surplus of 1.35 billion euros, equivalent to 0.12% of GDP, 0.05 percentage points less than in the first quarter of 2016. Note the upward trend shown by social contributions, up by 5.8% in the first quarter of the year and by 6.2% last month.
The State Public Employment Service posted a surplus of 201 million euros, equivalent to 0.02%, compared with the 452 million surplus posted in the first quarter of 2016. This lower surplus is due to the absence of transfers received from the State to finance unemployment benefits, versus the 984 million received in the same period the previous year, as a result of the favourable performance of the job market. The Social Security System's surplus has shrunk from 1.47 billion in 2016 to 1.21 billion this year, due to the fact that the 2.9% growth in spending, totalling 30.54 billion euros, outstripped revenue growth (1.9%), which totalled 31.75 billion euros. Finally, the Wage Guarantee Fund (Spanish acronym: FOGASA) posted a deficit of 62 million euros, 7 million more than the figure recorded in March 2016.
Regional Governments
To month-end March the deficit of Regional Governments stood at 0.12% versus the 0.11% posted the previous year. This is partly due to the different performance of prepayments from the financing system in 2016 and 2017
Non-financial revenues in this subsector are up by 2.4% to 36.59 billion euros. A contributing factor was the increase of tax revenue, up by 7.7% overall, or 956 million more than in the first quarter of 2016. Meanwhile, non-financial spending grew by 2.8%.
For further information on the State budget execution please consult the document "Main economic and financial activity indicators of the State", available at:
For more detailed information on the budget execution of the Central Government, Regional Governments, and Social Security, please consult the "Monthly report (national accounting consolidated data)" available at:
