Spain meets deficit goal and finishes 2023 with 3.64% GDP.

Spain’s 2023 Financial Year: Balancing Deficit Reduction with Social Protections

Spain’s 2023 financial year ended with a public deficit of 3.64% of GDP, including financial aid, slightly lower than the provisional 3.66% reported by Finance Minister Mara Jess Montero last week. The Ministry stated that the data changed minimally after receiving the final national accounting data, with the deficit standing at 3.65% excluding financial aid.

Despite this slight reduction in the deficit, Spain has continued to strengthen its Welfare State and social protections to combat the effects of the war in Ukraine. Since the start of the pandemic in 2020, Spain has reduced its deficit by over 60 billion euros while expanding public services. In fact, despite record contributions and increased employment, the Social Security system closed 2023 with a deficit of 8,627 million euros, equivalent to only 0.59% of GDP. This is an impressive feat given that employment reached a record high of 21 million individuals in Social Security affiliates last year.

The closing data for 2023 also shows a negative balance of -8,211 million euros for the Social Security Funds, which include Fogasa (Salary Guarantee Fund) and SEPE (Spanish Public Employment Service). However, this figure represents only a small portion of Spain’s overall debt load. Overall, the Spanish financial landscape in 2023 was marked by a mix of deficit reduction efforts and reinforced social protections.

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