Thanks to rising tax revenues, Spain reduced its budget deficit significantly in the first quarter of this year. The cumulative deficit of the Spanish authorities was 29.6 billion euros and 2.27 percent of the gross domestic product (GDP), as announced by the budget ministry in Madrid. In the first quarter of 2021, the public deficit was 4.45 percent of GDP.
The ministry points to a good development in tax revenues due to the “economic boom” and a large number of newly created jobs. In the first six months, tax revenue amounted to 115.3 billion euros – 23.2 percent more than in the previous year. Revenues from value-added tax rose by 19.7 percent, while income and property taxes brought in 35.4 percent more.
Madrid can use the money well: the government has budgeted almost 30 billion euros for measures to cushion inflation such as fuel discounts, pension increases and free tickets for local public transport. Despite this additional spending, it has set itself the goal of lowering the budget deficit and national debt from 118.4 percent of economic output to a good 115 percent.
