The General State Budget for 2023 passes its first reading in the Upper House by a large majority

The Minister for Treasury and Public Function, María Jesús Montero, has highlighted the importance of approving a General Budget that benefits the social majority of the country and provides Spain with political stability and economic certainty in the current complex context due to the Russian invasion of Ukraine.

In this regard, the minister thanked the political groups that have supported these accounts. Specifically, Montero pointed out that on 24 November, the budget was approved in the Lower House of Parliament with the backing of ten political parties, in a clear demonstration of the government's capacity for dialogue and agreement that will continue during the procedure in the Upper House.

Likewise, the Minister for Finance highlighted the realism and prudence of the budgets drawn up with forecasts endorsed by the Independent Authority for Fiscal Responsibility (AIREF), and which also received the approval of the European Commission a few days ago.

During her speech in the Upper House of Parliament, the Minister for Treasury and Public Function stressed that the 2023 Budget strengthens the welfare state while maintaining the commitment to reduce the public deficit from 5% of GDP in 2022 to 3.9% of GDP next year, and also to reduce public debt, with a decrease from 115.2% this year to 112.4% in 2023.

With this in mind, Minister Montero rejected the opposition's "catastrophic" criticisms and recalled that all institutions predict that Spain will grow above the euro area average in 2022 and 2023. She also pointed out the dynamism of the labour market with the creation of quality employment and with one out of every two new contracts signed being permanent.

The minister emphasised that these economic prospects make Spain an attractive country for investors, with investments worth €20 billion that will generate around 100,000 jobs announced in recent weeks.

Measures to combat inflation

The public accounts involve the highest social spending in history with €274.445 billion, including European funds. If EU aid is excluded, social spending stands at €266.719 billion, which is 35.4% more than the 2018 Budget, the last of Mariano Rajoy's government. In fact, in the 2023 Budget, record funding figures will be reached for study grants, dependency, health and the fight against gender violence.

These budgets also respond to the problems of rising prices resulting from the Russian invasion of Ukraine. To this effect, they increase the protection of the middle and working classes with free transport on Local, Commuter and Medium- Distance trains, as well as measures to maintain the purchasing power of pensioners with the revaluation of pensions in line with the CPI, a decision compatible with the sustainability of the system, as for the first time in 13 years resources are incorporated into the Pension Reserve Fund with €2.96 billion.

The most vulnerable groups will also see their Minimum Basic Income increase by 8.5%, which will benefit 1.2 million people. For its part, the IPREM, the reference index used for granting many subsidies, increases by 3.6% and will stand at €600. In addition, the social thermal bonus is increased by €102 million.

In turn, the corporate tax rate for SMEs with a turnover of less than one million euros will be reduced from 25% to 23%. This measure is complemented by the processing of a bill to make energy companies, financial institutions and large fortunes contribute more to achieve a fair distribution of the crisis.

Last, the Budget's priority is to promote the transformation of the productive model thanks to €25.16 billion in European funds between the annual instalments of the Recovery Mechanism, the REACT-EU and the addendum, once the final amounts allocated by the EU in terms of European funds are known.

Non official translation