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Spain: public deficit at 10.09% of GDP in 2020, a record since 2009

2021-03-29T16:52:30.899Z


Spain's public deficit exploded in 2020 compared to the previous year as a result of the pandemic, exceeding 113 billion euros, or 10.09% of GDP, a record since 2009, announced on Monday the Ministry of Finance. Read also: Spain presents an ambitious economic development plan in Africa These results reflect " the impact on the public accounts of Covid-19 ", but they also reflect " the unpreceden


Spain's public deficit exploded in 2020 compared to the previous year as a result of the pandemic, exceeding 113 billion euros, or 10.09% of GDP, a record since 2009, announced on Monday the Ministry of Finance.

Read also: Spain presents an ambitious economic development plan in Africa

These results reflect "

the impact on the public accounts of Covid-19

", but they also reflect "

the unprecedented effort of Spain to combat this health emergency and deploy a battery of measures intended to mitigate the economic and social crisis

", Says the ministry in a press release.

The deficit represented in 2019 only 2.86% of the gross domestic product (GDP), which means that its share in relation to national wealth has multiplied by 3.5 in one year.

The pandemic first led in 2020 to a fall in public finance revenues of nearly 25 billion euros, or about 5% of GDP, explains the ministry, which however highlights the "

resistance of the tax system

".

Faced with this crisis, public spending increased by 53 billion euros compared to 2019, an increase of 10.1%.

The ministry points out that 85% of this increase in public spending from one year to the next (or 44.9 billion) is attributable to measures "

adopted specifically to mitigate the socioeconomic effects of the pandemic

", among which the partial unemployment assistance.

Spain ended 2020 with more than half a million additional unemployed, especially in tourism and hospitality.

45 billion euros: the socio-economic cost of Covid-19

Faced with this situation, the left-wing government led by socialist Pedro Sánchez extended the public funding of partial unemployment plans until May 31.

Of the approximately 45 billion euros which therefore represent the socio-economic cost of Covid-19 for Spain's public finances, nearly 40.5 billion, or about 90%, come from the central state, further details the press release.

In addition, the Ministry of Finance explains that in order to comply with a Eurostat decision, Spain had to integrate the Company for the Management of Assets from the Restructuring of the Banking Sector (Sareb) into public administrations in 2020.

If we take into account this accounting procedure, which automatically led to an increase of nearly 10 billion in the deficit of public accounts, the total deficit slightly exceeds 123 billion euros and is close to 11% of GDP.

But the Ministry of Finance emphasizes that this result remains despite everything "

lower than the government's forecasts

", which were 11.3%, and the estimates of the IMF (11.7%) and the European Commission (12.2 %).

Spain, one of the European countries hardest hit by the pandemic, saw its GDP collapse by 10.8% in 2020 over one year, against an initial estimate of 11% at the end of January, according to the final figure published Friday by the National Institute of Statistics (INE).

This performance is one of the worst in the euro zone.

In terms of health, the country has recorded more than 75,000 deaths and more than 3.25 million cases of Covid-19.

Read also: Spain: the fall in GDP in 2020 revised to 10.8%

Spain had succeeded in reducing its deficit to 2.5% of GDP in 2018, succeeding, for the first time in more than ten years, to fall below the 3% mark, as required at the time by Brussels, which then enabled him to exit the European excessive deficit sanction procedure.

Source: lefigaro

All business articles on 2021-03-29

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