The public deficit falls by 28% in 2021, to 6.76% of GDP | Economy

The deficit of the public administrations as a whole stood at 81,521 million euros in 2021, a figure 27.9% lower than that of the previous year, when it reached 113,060 million euros. This is clear from the data advanced this Thursday by the Minister of Finance, María Jesús Montero, when presenting the figures of the 2021 budget execution. “The fiscal balance improves due to greater activity and without applying cuts to the Welfare State,” he said the minister. In this way, the Executive manages to reduce the deficit below the objective that had been set, which was 8.4% of GDP.

The gap between spending and budget revenue last year amounts to 6.76% of GDP, which represents a reduction of 3.3 percentage points. This is the largest reorganization of the historical series without counting financial aid. If these transfers to financial entities are included, the greatest correction occurred in 2013 because the previous year more than 40,000 million in aid to banks were included.

The Minister of Finance and Public Function, María Jesús Montero, explained that the deficit has performed better than expected due to the good performance of tax collection. In addition, she has stressed that the correction has been made thanks to the income protection measures during the pandemic and not because of the cuts undertaken by previous governments. “This improvement in the evolution of the deficit allows us to have a greater margin to face the needs derived from the war in Ukraine”, said Montero.

In the fourth quarter of 2021, the general government deficit stood at 28,239 million euros, below the negative balance of 37,538 million euros in the same quarter of 2020. If seasonal and calendar effects are eliminated, the deficit of public administrations reached 4% of the quarterly GDP in the fourth quarter of last year, 2.8 points less than in the previous quarter. The Minister of Finance will appear this Thursday at a press conference to detail the budget execution data corresponding to 2021.