The Catalan Government had a 6.23% budget surplus in the first four months of the year

Barcelona (ACN).- The Catalan Finance Ministry released the figures for the first four months of 2012 on Tuesday. From January to April, the Catalan Government’s budget had a surplus of 6.23%, corresponding to €534.8 million. This data is particularly positive as in the same period last year, the Catalan Government’s finances had a deficit of €1.13 billion. During the first four months of 2012, the Catalan Government reduced spending by €240 million in comparison to the same period last year, which represents a 3% reduction. This spending reduction has been achieved despite an 8% increase in the costs related to the Catalan Government’s debt. Spending from January until April represented €8.052 billion while revenue was €8.587 billion, according to the budget execution figures released by the Catalan Finance Ministry.

Despite the improvement in the budget figures, spending is affected by the increase in the financial costs of the Catalan Government’s debt. From January until April, €459 million was paid while during the same period last year €423 million was paid (8% less). Another item that increases its budget is ‘capital transfers’, which groups all the transfers made by the Catalan Government to its own departments as well as to other public institutions (such as town halls) and public companies. This item has increased by €16 million in relation to last year. However, investments have dropped by 39%, falling from €232 million until April 2011 to €142 until April 2012.

Spending has been reduced by €240 million from January until April, including financial costs. Therefore, the Catalan Government continues reducing spending month after month, as the accumulated reduction between January and March was €195 million.

Revenue has increased by 20% in relation to last year, due to the increase of the Spanish Government’s transfers, since revenue from taxes has decreased. The Spanish Government has transferred €2.984 billion to the Catalan Government during the first 4 months of the year, part of it corresponding to payments from 2010.During the first four months of the year, the Catalan Government had €8.587 billion in revenue, while in April 2011 it was €7.161 billion. However, revenue from taxes has decreased. In the first quarter of 2012 (from January until March), revenue from Income Tax, Wealth Tax, and Inheritance Tax dropped by 7%. In addition, taxes on legal documents decreased by 25% due to the drop in house sales.

By the end of the first quarter of 2012, the Catalan Government’s budget had a budget surplus of 19.36%, representing a surplus of €1.11 billion. This was mainly due to the transfers made by the Spanish Government, which represented around €1.8 billion. From this amount, €945 million corresponded to payments from 2010. The other €860 million corresponded to an early payment of Catalonia’s share of the Income Tax, the VAT, and special taxes (mainly on fuels and tobacco).