The downward trend in the government deficit, which started in 2021 and will continue in 2022 and 2023 as a result of the improvement in economic activity and employment, is set to continue.
The Ministry of Finance has published on its website a series of data corresponding to the budget execution of the Public Administrations in 2024.
The government deficit at the end of May stood at 0.70% of GDP, compared with 0.88% in the same period of 2023. Thus, the deficit in the first five months stands at 10,884 million euros, a reduction of 15% compared with the 12,810 million recorded in May last year. The evolution up to May shows that the State deficit continues on the downward path that began in 2021 and has been maintained in 2022 and 2023 as a result of the improvement in economic activity and employment.
Likewise, the Ministry of Finance has also published today on its website the consolidated deficit data of the Central Administration, Autonomous Communities and Social Security for April in national accounting terms, standing at 0.39% of GDP compared with 0.42% recorded in the previous year. Finally, the data of the execution of 2024 of the Local Corporations, corresponding to the first quarter of the year, have also been disseminated.
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The government deficit stood at 0.7% of GDP in May and is 15% lower than in the same period last year
Government deficit (May)
In the first five months of the year, the State has registered a deficit equivalent to 0.70% of GDP, a decrease compared to 0.88% in the same period last year. This brings the deficit to 10.884 billion euros, a reduction of 15% compared to the 12.810 billion recorded in May 2024.
If interest is deducted from the deficit, the primary balance is obtained. Thus, at the end of May 2024, a primary surplus of 1.72 billion euros was obtained, compared with a primary deficit of 1.754 billion euros in 2023.
This development is due to an increase in revenue of 3.7% to 96.941 billion, while expenditure rose by 1.5% to 107.825 billion.
Non-financial resources of the State
Non-financial resources amounted to 96,941 million, 3.7% more than in the same period of 2023. Taxes amounted to 81,504 million, nearly 84% of total resources, and grew by 8.2% compared to May 2023.
Taxes on production and imports increase by 5.5%, of which VAT revenues amount to 35,792 million, 6% higher than in 2023. The increase in VAT is due to various reasons, including the temporary rate reductions that were implemented as a result of price pressures on various essential goods in production and consumption, and which from January 2024 begin to increase gradually.
On the other hand, revenues from the Tax on Certain Digital Services increased by 21.7% (+EUR 31 million) to EUR 174 million and from the Tax on Insurance Premiums by 7.4% (+EUR 73 million) to EUR 1,058 million.
Current taxes on income and wealth amounted to 31,266 million, 12.9% higher than in the first five months of 2023. Of this amount, 844 million correspond to the Temporary Tax on Credit Institutions and Financial Credit Establishments. Personal income tax reached 17,678 million and revenue from non-resident income tax (1,538 million) rose by 10.0%.
In addition, taxes on capital amounted to 78 million euros and revenues from social security contributions amounted to 2,378 million euros.
In addition, taxes on capital amounted to 78 million euros and income from social security contributions amounted to 2,378 million euros.
Property income amounted to 3,695 million euros, of which 3,009 million euros from interest, up 58.9% on the previous year, and 686 million euros from dividends and other income.
Income from the sale of goods and services totalled 750 million euros. Finally, the rest of the resources recorded 2,623 million, including current investment aid and international cooperation, among others.