The Government has given the green light to a new spending ceiling in the Council of Ministers this Tuesday, which registers an unprecedented rise of more than 50%, to 196,000 million, and which is the starting signal for the design of some new Budgets.
The non-financial spending limit, known as the spending ceiling, is a barrier that marks the maximum outlay that ministries can make.
In February, before the health crisis, the Government had set it at 127,609 million euros for 2020, 3.8% more than the previous year.
Now, this figure has seen its biggest rebound thanks to community aid.
The Government expects to receive 140,000 million from the European Union over the next few years, of which it is estimated that more than 20,000 will already be on the table in 2021.
This Tuesday, the Government has also revised down the macroeconomic picture and has crystallized in it the hard blow of the coronavirus, deeper than that expected at the beginning of the pandemic: the new forecasts estimate a drop in GDP of 11.2% for 2020 and a 7.2% rebound in 2021, more generous than previously forecast.
Previous projections, published last May in the Stability Plan that he sent to Brussels, predicted a 9.2% drop in GDP for 2020 and a 6.8% jump in 2021. Along with this, a lag of double-digit public accounts, 10.3%, which the Government now places at 11.3% for this year and 7.7% for 2021. With this update, the Executive's figures are close to those that the main organizations, both national and international, have put on the table.
The main entities had already worsened their forecasts.
The Bank of Spain revised down its forecasts on the performance of the economy in September.
The supervisor estimates for this year a fall in GDP of between 10.5% and 12.6%, compared to the collapse, already pronounced, of between 9% and 11.6% that it handled in June.
The outbreaks and new restrictions on movement are the main cause of this downward revision, which has the effect of a slowdown in activity despite the lack of focus that took place during the summer.
The IMF, for its part, maintained its forecasts for this year with a drop in GDP of 12.8%, although it improved the rebound estimated for next year by almost one point, to 7.2%.
The Funcas consensus panel, which includes the projections of the main institutions, points to a collapse in GDP of 11% by 2020.
Nadia Calviño, Minister of Economic Affairs, clarified this Tuesday that the current scenario continues to be surrounded by a lot of uncertainty, although she has advanced that the high frequency indicators point to the fact that the GDP has rebounded vigorously in the third quarter of the year, "in around 13% ”.
"An asymmetric V-shaped recovery scenario continues to be drawn," she assured at the press conference after the Council of Ministers.
Deficit targets
Another anomaly compared to previous years is the suspension of the fiscal rules for this year and the one announced last week by the Government due to the exceptional scenario caused by the pandemic.
This decision implies that the deficit and debt path known this Tuesday is not binding, but is taken as a reference rate.
The Executive justified this temporary interruption of the budget corset by the unprecedented situation created by the health crisis, which also led Brussels to apply the escape clause and freeze the Stability and Growth Pact - which sets a maximum limit for the deficit of 3% of GDP and 60% for debt for community partners.
This shift also eliminates the need to approve the deficit and debt targets in Congress, a delicate vote that would further lengthen the preparation of the Budgets.
"This is an extraordinary measure that is recommended by most of the international institutions," he said.
the Minister of Finance, María Jesús Montero, this Tuesday, who added that she trusts that this exceptional situation will be approved in Congress.
This suspension of the rules is not only valid for the Central Administration, but also applies to municipalities and communities.
Yesterday, Monday, the Ministry of Finance transferred to the regions a new reference rate for 2021: from a deficit of 0.1% of GDP agreed before the pandemic, now the Government has recommended that the hole not exceed 2.2%.
Half of these red numbers, Montero explained, could be assumed by the central Administration through a transfer of more than 13,400 million.
The Minister of Finance added this Tuesday that the majority of the estimated deficit for this year, of 11.2%, will be assumed by the Central Administration, which will experience, according to the new forecasts, an increase of 5.2% in 2021 due to the approval of the fund for the communities and a new fund of 18,396 million euros for Social Security of which it will take charge.