Spain’s Public Deficit Reduces Slightly in 2023, Marking Four Consecutive Years of Meeting EU Budgetary Targets

Spain meets deficit goal and finishes 2023 with 3.64% GDP.

In 2023, Spain recorded a public deficit of 3.64% of GDP including financial aid, slightly below the provisional 3.66% reported by Minister of Finance Mara Jess Montero last week. The definitive national accounting data revealed that the deficit stood at 3.65% excluding financial aid. Despite this slight reduction in the overall deficit, Spain remained committed to fulfilling its budgetary commitments to the European Union, with a closing data for 2023 that surpassed the forecast of 3.9%. This marks the fourth consecutive year that Spain has met its targets set by Brussels.

The Ministry of Finance attributed the deficit reduction to economic growth and increased employment in Spain, which grew at a rate of 2.5% in 2023, five times higher than the euro zone average. A record number of Social Security affiliates reached 21 million employed individuals in Spain, contributing to this growth.

Despite this positive news, Spain also continued to reinforce its Welfare State and social protections in order to combat the effects of the ongoing conflict in Ukraine. Since the start of the pandemic in 2020, Spain has reduced its deficit by over 60 billion euros while expanding public services. The Social Security system closed 2023 with a deficit of just over €8 billion (8,627 million euros), equivalent to only about half a percent (0.59%) of GDP.

However, despite this small surplus for Social Security funds last year, there was still a negative balance for these funds overall, amounting to €8 billion (8,211 million euros), equivalent to about half a percent (0.56%) of GDP.

In addition to Social Security payments and transfers from other sources totaling €43.9 billion (44 billion euros) last year,

Overall, while there were some improvements made in reducing Spain’s public deficit and promoting economic growth and employment opportunities in 2023, it is clear that there is still much work to be done before we can say that Spain is on track towards achieving sustainable fiscal stability.

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