Spain cuts 2024 budget deficit target to 3% of GDP
2023.04.27 08:34
© Reuters. FILE PHOTO: Spain’s Budget Minister Maria Jesus Montero arrives to attend a cabinet meeting at the Moncloa Palace in Madrid, Spain, January 14, 2020. REUTERS/Susana Vera/File Photo
MADRID (Reuters) – The Spanish government intends to lower the budget deficit to the equivalent to 3% of gross domestic product in 2024 from 3.9% projected for this year, Budget Minister Maria Jesus Montero said on Thursday.
The plan means Spain should reach the 3% level usually considered healthy for public finances one year earlier than initially planned. The European Union set it as a threshold after the financial crisis of 2008, but the mandatory target has been suspended since 2020 due to the COVID-10 pandemic.
The announcement came a day after the European Commission proposed a new framework of fiscal rules, aimed at reducing the public debt of the bloc’s countries.
Spain’s previous target for 2024 was of 3.3% of GDP.
Montero said the government now targets a budget gap of 2.7% in 2025, and 2.5% for 2026.
She said economic growth would be sufficient to meet these new targets without implementing spending cuts. The government did not explain how it plans to reduce the size of public debt, which in 2022 was 113.1% of GDP.
After years of fiscal consolidation, Spain recorded one of the highest deficits in the EU in 2020, at 11%, as GDP contracted by a record 11.3%.
