The Community will be able to budget some 70 million more when the Ministry raises the deficit target from 0.1% to 0.3%
The Council of Ministers has taken the first step to prepare the General State Budget for 2023 by approving a spending ceiling – the maximum that administrations can assume, except for debt – that is close to 200,000 million euros. Coincidences of the calendar, it does, in addition, with an eye on the different electoral elections that will arrive next year, focused on communities and municipalities. That limit is set at 198,221 million, which is a record, with an increase of 1.1% compared to the current one. Despite this increase in a context of crisis and uncertainty, the Minister of Finance, María Jesús Montero, insisted yesterday that she “will not prevent further reduction of the budgetary imbalances” that lie in wait for Spain.
As a novelty, the Treasury will give more room for spending to communities and local corporations, as well as Social Security, at the expense of the Central Administration. “We appreciate a different distribution of efforts,” said Montero after the Council of Ministers. The deficit margin of the communities will be 0.3% compared to the current 0.1%.
This increase in the maximum deficit allowed for 2023 will allow the Community of the Region of Murcia to spend some 70 million euros more next year, since each tenth of the deficit represents approximately 34 million euros, according to calculations by the Ministry of Economy and Tax authorities.
Calviño maintains his economic expectations this year, with inflation close to 8%, but lowers them for the next
Thanks to this greater margin of difference between income and expenses, the councilor Luis Alberto Marín will have fewer difficulties in adjusting the Community Budgets for next year.
At today’s meeting of the Fiscal and Financial Policy Council, Marín will once again demand the reform of the current regional financing system which, according to a new study, is responsible for 80% of the regional public debt. On this report, Podemos yesterday demanded information on its cost, considering that it is “a commissioned job without any credibility that is only intended to cover up the disastrous economic management of the regional government.”
The municipalities will also have more room for maneuver by increasing their budget and deficit capacity, as well as Social Security, to which a payment of almost 20,000 million euros will be injected in an extraordinary way.
Despite this expense, the Treasury insists that Spain will reduce the public deficit in 2023 to 3.9% of GDP next year, compared to the 5% it estimates it will close in 2022, and 6.8% in 2021.
“Complex environment”
To prepare this spending ceiling, the Government has updated its forecasts for this year and next, with calculations that practically maintain the rise in GDP at 4.3%, the same level that it estimated until now despite the “complex environment » that Spain is facing. However, for 2023, the Executive has significantly cut its calculation to 2.7%, eight tenths less than until now. Economy assumes the thesis of the Bank of Spain that inflation will touch 8% throughout this year.
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