The Catalan Government ended the first quarter of 2013 with a deficit of 0.21%

Barcelona (ACN).- Between January and March, the Catalan Government had a budget deficit of €411 million, representing 0.21% of Catalonia’s GDP, according to data released on Thursday by the Spanish Finance Ministry. The Autonomous Communities posted a total public deficit of €1,235 million at the end of the first quarter of 2013, corresponding to 0.12% of Spain’s GDP. According to the Spanish Deputy Minister for Budget, Marta Fernández Currás, the figure represents half the deficit posted in the same period last year if the advance transfers that the Spanish Government made in early 2012 are not taken into account. In the first half of last year, the Spanish Executive made advance payments to the Autonomous Communities – which otherwise would have been done a few months later – and as a result they had a budget surplus in the first quarter of 2012. As Fernández Currás explained, without those payments, they would have had a deficit of double that registered in the first quarter of 2013. The Spanish Government stated that it was “satisfied” with the results, since they show the Autonomous Communities are working hard on their fiscal consolidation. However, the definitive deficit targets for each Autonomous Community for 2013 have not been set by the Spanish Government yet. Madrid set a general 1.2% target a few weeks ago but everybody assumes it is a provisional figure and it will be raised as negotiations are on-going with the Catalan Government. Rumours indicate that Catalonia’s deficit target may finally be around 1.8%, although the Catalan Executive was asking for a deficit of 2.1%. The Catalan request is based on the fact that, since the Autonomous Communities manage 36% of Spain’s total public spending and exclusively run basic services such as healthcare and education, they should be allowed at least a third of Spain’s expected total deficit of 6.3%. While the Autonomous Communities had a 0.12% deficit, the Spanish Government reached a deficit of 1.63% of the country GDP at the end of March 2013.

The Catalan Government’s deficit in the first quarter of 2013 is the second largest one among the Autonomous Communities in absolute terms. However, Catalonia is also the Autonomous Community with the largest economy within Spain. The Community of Madrid had a €469 million deficit, while Catalonia ended March with a €411 million deficit. They are followed by Andalusia, which had a €361 million deficit. On the other side, the Valencian Community (traditionally called Valencian Country) had a €334 million budget surplus and the Basque Country ended the period with a €92 million budget surplus.

Regarding the deficit volume in relative terms, Catalonia comes sixth out of seventeen. The Autonomous Community with the highest relative deficit is Navarra, with a 1.06% deficit. The Region of Murcia comes second with a 0.40% deficit. Some Autonomous Communities have a budget surplus, such as La Rioja (+0.60%) and the Valencian Country (+0.33%).

The Spanish Deputy Minister emphasised in a radio interview with Onda Cero that the total figures for the Autonomous Communities represent “just half of the deficit reached in March 2012”, if “the advance transfers, which will not be made this year and which last year were made early” are not taken into account. “During the first term [of last year], many transfers were made [in advance] in order to solve their problems finding funds” in the international financial markets, explained Fernández Currás.

Spanish Government’s deficit reached 1.63% of the country GDP in the first 3 months of 2013

In addition, the Spanish Government’s deficit in the same period of 2013 reached 1.63% of the country GDP. The Spanish Government is responsible for 50% of Spain’s total public spending and the Autonomous Communities are responsible for 36% of it. In March the Autonomous Communities posted a total deficit of 0.12% of Spain’s GDP. However, Fernández Currás was satisfied with the results, since in the same period of 2012, the Spanish Government posted a deficit of 1.95%. Furthermore, Fernández Currás also emphasised that Social Security – which is managed by the Spanish Government and pays pensions and unemployment benefits – ended March with a budget surplus, since the Spanish Government made advanced payments. “We have to focus on these positive results and forget a little about all the noise because the main objective is to answer as a serious and responsible country, in all the sub-sectors, and this is already happening”, she concluded.