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The Government foresees a record investment to avert the crisis

2020-10-29T02:29:48.000Z


The Budgets reserve 39,000 million for this item thanks to European fundsThe Minister of Finance, María Jesús Montero, presented this Wednesday in Congress the most expansive budget bill in history. The accounts for 2021 show record income and expenses, with an unprecedented increase in investment thanks to European funds. On the revenue side, the Government is confident of an increase driven by a cocktail of new fiscal measures and tax changes and, above all, by the s


The Minister of Finance, María Jesús Montero, presented this Wednesday in Congress the most expansive budget bill in history.

The accounts for 2021 show record income and expenses, with an unprecedented increase in investment thanks to European funds.

On the revenue side, the Government is confident of an increase driven by a cocktail of new fiscal measures and tax changes and, above all, by the strong improvement in the cycle that it estimates for next year.

A forecast that many organizations are already beginning to consider excessively optimistic in the face of new infections and restrictions on mobility.

"These are not normal budgets, to use, so you have to be cautious with all comparisons," said Montero.

The 2021 accounts will indeed be unique for several reasons.

Some are exogenous, such as the historical moment, marked by a pandemic that has brought the world economy to its knees, or the unprecedented cannon of aid that the EU will provide.

Others are internal: if approved, they will be the first accounts to see the light in almost three years, since those of the PP of 2018 are still in force, and they will also be the first made in Spain by a coalition government.

To underpin the recovery, the government has budgeted for record public investment.

He foresees that this item will double that of 2020, to exceed 39,000 million between real investments and capital transfers.

The latter will be fattened to levels never seen before by European aid, which will account for 50% of the total.

The Budget project already includes the 27,000 million of the first tranche of European funds allocated to Spain, although the Government will only receive about 7,000 million next year and will borrow for the rest.

The bulk will go to industry and energy (21.1%), followed by R & D & i and digitization (17.8%).

A similar figure, 17.6%, will be dedicated to resilient ecosystems and infrastructure.

The Government trusts that this manna will have a multiplier effect on growth: with this, it calculates that GDP will rebound in 2021 by 9.8% - compared to 7.2% without European aid and a fall of 11.2% this year— and that State spending grows 33% to the historical level of 383,542 million —550,484 million in the case of the Consolidated Budget, which includes Social Security and autonomous bodies—.

Social spending will be the protagonist.

Pensions, which will be revalued, and unemployment benefits will continue to be the items with the most weight in this chapter.

But there will be generalized increases in spending: more money for R + D + i, education, health, dependency, culture, housing.

The rebound in GDP estimated by the government will also boost revenues.

The Treasury expects a collection of 222.107 million in 2021, the highest in history and 13% higher than this year.

The improvement in consumption, business activity and the economy in general will raise revenues from all taxes, to which will be added new figures and tax changes that will contribute an additional 6,000 million to the final account.

Among the “adjustments” of the new accounts there is an increase in personal income tax on high incomes —which according to the Government will only affect 0.17% of taxpayers—, a limitation to 95% of the exemption of dividends and capital gains for large companies or a VAT hike on sugary drinks.

Google

and

Tobin

taxes and two plastic and waste levies

will also be launched

.

However, we will have to wait for the negotiation in Congress: the PNV has shown its discomfort at the rise in diesel taxation that the Government has introduced in the Budgets, while Ciudadanos has assured that it has already managed to eliminate it.

"The PNV is a preferred partner," Montero settled this Wednesday: "Therefore, we will reach an agreement."

But, above all, we will have to be aware of the pandemic.

Accounts begin their

iter

legislative, which will last about three months, while locks are enacted to limit contagion.

The new restrictions seem to have already left the government's growth forecasts, already optimistic, on paper, according to several organizations.

Montero pointed out that the priority is sanitary measures and admitted the high uncertainty: "We have to wait for the vaccine to arrive soon."

For her, 1,000 million are already budgeted.

Public debt will hit highs

A search of the public debt forecast for 2021 in the famous yellow book, the document where the Government condenses the Budgets, does not yield any results.

The Executive hides the figure that he only revealed almost covertly in the budget plan he sent to Brussels.

In that document, he explains that public debt will rise to 118.8% of GDP this year and will fall to 117.4% in 2021, despite the fact that it will increase by about 125,000 million.

The trick lies in the strong growth in nominal GDP that the government projects for next year.

It considers that it will receive and spend the 27,000 million of European aid, which will act as a lever to relaunch the economy.

Most experts are more cautious and estimate that the debt will exceed 125%, the highest percentage in more than 100 years.

Source: elparis

All business articles on 2020-10-29

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