Spain’s left-wing coalition government led by President Pedro Sánchez of the Socialist party announced Tuesday that it was increasing the spending ceiling for its projected 2020 fiscal budget by 3.8 percent to total 127.6 billion euros, which if approved by Congress will result in a rise in the federal budget deficit of 1.8 percent of Spain’s gross domestic product (GDP) this year.
Approved in the Sánchez administration’s weekly Consejo de Ministros cabinet meeting, the new budget figures announced Tuesday increase the annual projected deficit for 2020 to 1.8 percent, up from the current 0.5 percent the government had been working with in the budget inherited from the last year of the conservative Partido Popular government of former President Mariano Rajoy in 2017.
Until now, the Sánchez government has been stuck working with the rollover of the last austerity budget of the Rajoy period, because it has so far failed to win congressional approval for budget proposals it put forward in 2018 and 2019.
The government also said it expects to bring down the deficit to 1.5 percent of GDP next year, with further reductions to 1.2 percent in 2022 and 0.9 percent in 2023.
► News Sources: Público, El País and Europa Press …
Speaking during the weekly ministers’ questions session on Tuesday in Spain’s Senate, Minister for Economic Affairs and Digital Transformation Nadia Calviño said the government is being responsible in putting forward a revised spending ceiling and deficit projections that are both realistic and in keeping with the coalition government’s plans to increase social spending while attempting to maintain Spain’s economic output. “Realism is the starting point of any (fiscal) orthodoxy,” Calviño said.
Calviño also said that the government had lowered its growth estimate for Spain’s economy to 1.6 percent, down slightly from the 1.8 percent previously projected, and that unemployment was expected to rise to 13.6 percent during 2020.
The first step by the Sánchez administration in the process whereby the government must win congressional approval for its 2020 budget or face the prospect of new elections, the projection of the increased spending ceiling drew immediate criticism from right-wing opposition parties. The conservative Partido Popular lambasted the Socialists over the proposed spending ceiling and budget deficit, saying the proposals will lead to uncertainty and instability, eroding consumer and producer confidence in Spain’s economy and the government.
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