The government hopes that the measures of the shock plan against inflation caused by the war in Ukraine do not mean breaking the line of reducing the public deficit. Be careful though. This was announced by the Minister of Finance Maria Jesus Montero. “Today, with all due diligence, the government will be able to meet the 5% deficit target,” the head of public accounts said as he presented last year’s budget execution data.
Montero has demanded public health health with a 6.76% deficit since the close of 2021, compared to 10.08% in 2020, which has a strong impact on the pandemic effect. This figure also means that the state was significantly behind the forecast it had in its budget plan for the fall, which predicted a gap of 8.4% by the end of the year. This was the commitment he had with Brussels by the end of 2021.
The government estimates the deficit is about $ 19,500 million lower than expected. “This allows us to deal with the challenges posed by the impact of the war in Ukraine,” Montero said in a statement. The executive branch this week unveiled a response package to the economic crisis in Eastern Europe, which amounts to about 6,000 million euros. The remaining 10,000 million are public guarantees for loans to affected companies through the ICO.
Despite this increase in spending, the executive is still pursuing the goal of reducing the government deficit, which is set at 5% this year. Similarly, the government should present a new plan to Europe in April, in which it will set out specifically how the Treasury expects inflation and the economic situation to affect public accounts.
The Ministry of Finance defended that the continuation of the reduction of the electricity tariff tax would mean a reduction of revenue by 1797 million euros in the second quarter of the year. If we add to that the impact that these measures have had since they started last year, they would have been around € 7,000 million. By the end of the year, it would have been 12,000 million. In any case, Montero argues that these are estimates that depend on price evolution. “Less impact means that measures to reduce the cost of electricity are working,” he said.
Source: El Diario
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