The 2024 General State Budget will be presented respecting the stability targets set in the Stability Programme, which will enable the deficit of the general government sector as a whole to be reduced to 3%.

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The Stability Programme already endorsed by the European Commission

The stability targets in force in 2024 will be those contemplated in the Stability Programme that the Government submitted in April 2023 to the European Commission and which received the endorsement of the Community authorities. This is the consequence of the Senate’s rejection for the second time of the deficit path proposed by the Ministry of Finance, which gave more fiscal leeway to the Autonomous Communities and local councils.

The Government, in compliance with the Budgetary Stability Law, approved the stability targets for 2024 on 12 December 2023. This new path, more beneficial for Autonomous Communities and Local Entities, was approved in Congress, but rejected by the Senate on 7 February. The Government, following the stipulations of article 15.6 of the Stability Law, re-approved the stability targets, which were once again approved in Congress and rejected in the Senate for the second time.

Therefore, in view of this scenario and following the indications of the State Attorney’s Office, the deficit and debt targets envisaged in the Stability Programme are applied, having been approved by the European Commission as they are considered to be progressing towards the balanced budget target. In this sense, the Ministry of Finance will present the 2024 General State Budget in line with these stability targets endorsed by Brussels.

In this way, the deficit target for all public administrations in 2024 remains at 3%, which will allow Spain to comply with the EU’s Stability and Growth Pact. This will mean reducing the deficit in just four years by seven points from the peak of 10.1% reached in 2020 due to the outbreak of the pandemic.

Targets by sub-sector
What does change is the distribution by subsectors. In fact, the path rejected in the Senate was more demanding for the Central Administration, as it assumed the greater margin granted to the Autonomous Communities and Local Councils, so that their target was 2.7%. Now, the path of the April Stability Programme is returned to and the deficit target stands at 3% of GDP.

For its part, the rejected path granted the autonomous communities a deficit target of 0.1% for 2024. However, with the Stability Programme’s path now being applied, the regional administrations will have to close the year with a balanced budget. In practice this means that, due to the Senate’s rejection of the path proposed by the Government, the Autonomous Communities will have around 1,456 million euros less fiscal margin to allocate to public services such as health, education or dependency.

With regard to Local Entities, the rejected path set a balanced budget target, as opposed to the surplus of 0.2% of GDP included in the Stability Programme, which is the one that will have to be applied. This means that local councils will have 2,924 million euros less fiscal capacity to be able to invest in public policies that benefit citizens.

Finally, Social Security maintains the deficit target of 0.2%, as it is the only subsector that remained unchanged in the Stability Programme and in the rejected path.