It considers the fiscal consolidation plan -as requested by the Bank of Spain- to be proven after the fall in the deficit registered until now
Oct. 17 () –
The Secretary of State for Budgets and Expenses, María José Gualda Romero, defended this Monday that the Government has decided to include in the 2023 Budget Plan, for the first time, two possible scenarios of income and expenses, a decision that responds to an exercise of “responsibility” and “transparency” in the face of the current strong uncertainty.
“What scenario ‘two’ comes to highlight for the year 2023 is that if the war situation persists […] this scenario contemplates it”, explained the Secretary of State in her speech at the Budget Commission in the Congress of Deputies.
The Government sent the 2023 Budget Plan to the European Commission last Saturday, which, for the first time, contemplates two possible scenarios of income and expenses due to the “context of high uncertainty” as a result of the invasion of Ukraine by Russia, which it has “a significant economic impact through high inflation”.
The second scenario contemplates a higher collection of about 10,500 million than initially estimated, which “will give room to extend and adopt those measures that are deemed appropriate, in order to protect vulnerable groups, the middle and working class, the self-employed and the productive sectors most affected by the energy crisis”.
Thus, specifically, the 2023 Budget Plan includes in scenario 1, the most conservative, that the total income of the Public Administrations as a whole will account for 42.3% of GDP, amounting to 587,609 million euros in terms of national accounting . Taxes will reach 344,627 million, which is 7.6% more than in 2022.
For its part, in the second scenario for 2023, it is expected that the total income of all public administrations will account for 43% of GDP, amounting to 597,265 million euros in national accounting terms.
SOME PGE TO CONTINUE GUARANTEEING PUBLIC SERVICES
As the Secretary of State has emphasized in the Budget Commission in Congress, the objective of the 2023 public accounts is to help society navigate this complex situation derived from the Russian invasion of Ukraine in a volatile context plagued by uncertainty and that force the development of “prudent and realistic” budgetary policies.
The Government intends with the Budgets to continue guaranteeing a robust social welfare system, while promoting public services since they act as a powerful factor of indirect income for households.
Despite the current context, Gualda stressed that the Spanish economy is facing this crisis and this uncertainty from a solid position. In addition, he has defended the Government’s “absolute” commitment to budget stability, despite the suspension of European fiscal rules, and proof of this is the reduction so far in the deficit and debt and the objective that in 2025 they be reduced to below 3% and 110%, respectively.
“Unlike previous crises, this decrease in the deficit has not come about through cuts in essential public services, but is due to economic growth and job creation,” he emphasized.
Thus, it takes for granted the fiscal consolidation plan – which the Bank of Spain has requested on several occasions – given the path of reduction of the public deficit.
EUROPEAN FUNDS: “THE RECOVERY PLAN HAS NO RISK”
On his side, the Secretary of State has valued the role of European funds, which are channeled through public accounts. Given the “doubts” about the disbursement of the third tranche of 6,000 million, Gualda has emphasized that the European Commission itself stated that the delivery of funds to Spain is not at risk, noting that Brussels “is very clear about compliance” with the country.
“The Recovery Plan has no risk”, he stressed, after explaining that it is expected that this third disbursement will be requested throughout the month of November, the last of this year.
