The autonomous communities as a whole will close 2022 with a public deficit of 1% of GDP, a figure higher than that estimated last July, but improving significantly in 2023 until it drops to 0.1%, according to the forecast of the Independent Authority for Fiscal Responsibility (Airef). This Friday, the entity published its individual reports on projects and basic guidelines community budgets autonomous until 2023, as well as its report on local corporations.
As for the autonomies, Airef has revised upwards the revenues and, to a greater extent, the expenditures, based on the execution data observed to date, the final closure in 2021, the information provided by the communities themselves and the latest measures, in both cases without considering Recovery, Transformation and Resilience Plan (PRTR). In particular, it foresees higher revenue collection in 2022, mainly through real estate sales tax and documented legal acts, as well as European funds.
By 2023, the global balance of the regional sub-sector will improve by 9-tenths fundamentally due to an “extraordinary” increase in the resources of the financing system, 23.9%, driven by the growth of payments on account and, to a greater extent, settlement, which turns positive again after the value this year “exceptionally” negative. According to the new forecasts, forecasts for 2022 for Andalucia are improving, while they are worsening in Aragon, Asturias, the Balearic Islands, Cantabria, Castilla y León, Castilla-La Mancha, Catalonia, Extremadura, Madrid, the Region of Murcia, Navarra, La Rioja and the Communities Valencia.
On the other hand, in 2023, Aragón, Asturias, the Balearic Islands, the Canary Islands, Cantabria, Castilla y León, Extremadura, Galicia, Madrid, Navarra, the Basque Country and La Rioja could end the year with a surplus or balance, or with a limited deficit like Andalusia. Castilla-La Mancha could achieve a close balance in relation to the reference indicated for the subsector and Catalonia a slightly larger deficit, and only for Murcia and the Community of Valencia, Airef continues to estimate deficits greater than 1% of regional GDP. In the medium term, he assesses the situation cyclical surplus in 2024 of 0.4% of GDPwhich will decrease until balance is reached in 2026.
For local corporations, the Independent Body for Fiscal Responsibility maintains its surplus forecast for 2022. 0.2% of GDP and raises it to 0.5% by 2023. As in the case of autonomies, the development of the surplus of local corporations is marked by the liquidations of the financing system, to which are added compensations between 2022 and 2024 for the negative liquidation in 2020, which will place the surplus in the past years at 0.6 percent
After analyzing new data, for this exercise he estimates the better performance of local revenues, primarily those arising from economic activity, despite the negative impact of imputation annual entire negative liquidation in 2020 of the state financing system, more than 2 tenths of GDP.
For 2023, it reaches a surplus of 0.5% due to the expected year-on-year growth of expenditure slightly above 2%, significantly below that forecast in income of almost 7 percent. According to their estimates, nine large local corporations will close 2022 with a deficit, including the effect of liquidation, among which the estimated deficit for Cabildo de Tenerife and City Council Barcelona, in addition to those from Madrid, Murcia, Córdoba, Valladolid and Gijon and the provincial councils of Valencia and Seville.
Of the 24 large corporations analyzed, 13 forecast a deficit this year despite the fact that most did not include the effect of liquidation in their forecasts, although none of them are expected to run a deficit by 2023, estimating improving income related to the activity and include the positive effect of the liquidation in 2020. At the same time, also according to the estimates of the corporations themselves, the year-on-year growth of accounting spending would reach an average of 12% in 2022, although the provincial councils foresee an increase of 20%, the Cabildo de Tenerife 50%, the City Council of Vigo almost 30% and that of Córdoba 22%.