Spain’s public deficit tumbled to 3.7% in 2023

MADRID: Spain’s public deficit fell just below the government’s target last year thanks to robust growth in 2023, Prime Minister Pedro Sanchez said on Wednesday.

The 3.7 percent rate was lower than the 3.9 percent forecast by the government and more than a percentage point lower than 2022 when it stood at

4.8 percent. The figure was achieved as the Spanish economy expanded by 2.5 percent last year, one of the highest rates in the eurozone, Sanchez told parliament. “Spain is in better shape than the European Union: we’re growing five times more than the average in the eurozone,” the Socialist leader said, vaunting his government’s policies of wealth “redistribution” and budgetary discipline.

“We are redistributing economic growth, we’re increasing pensions, raising the minimum wage and strengthening public services and we’re doing it in a fiscally responsible way,” he said.

Spain’s economic growth, driven by record tourist numbers, also enabled Madrid to reduce the debtto-GDP ratio to 107.7 percent, according to the INE

national statistics institute. Sanchez’s government has assured Brussels it would continue its policy of consolidating public accounts throughout 2024, bringing its public deficit to 3.0 percent—the maximum level set by European treaties.

“We have a clear commitment to reducing the deficit and debt ratio,” Finance Minister Carlos Cuerpo told the Expansion business daily. Under European budgetary rules, member states’ public deficit must in theory remain equal to or under the symbolic figure of 3.0 percent while their debt ratio must not go beyond 60 percent of GDP. However early last month, the European Parliament and member states agreed to reform the budgetary rules which are seen as obsolete and are rarely respected.