Spain’s Mixed Financials in 2023: Fulfilling Brussels Commitments, Protecting Social Services and Growing Economy

Spain meets deficit goal and finishes 2023 with 3.64% GDP.

In 2023, Spain’s public deficit was slightly lower than expected, standing at 3.64% of GDP including financial aid, as reported by the Ministry of Finance. The data changed minimally after receiving definitive national accounting data, with the deficit standing at 3.65% excluding financial aid.

Spain has met its commitments to Brussels for the fourth consecutive year, and has even surpassed the forecasted deficit of 3.9%. Despite this achievement, Spain did not skimp on reinforcing its Welfare State and social protections to combat the effects of the war in Ukraine. Since the start of the pandemic in 2020, Spain has reduced its deficit by over 60 billion euros while expanding public services. The Social Security system closed 2023 with a slight deficit of 8,627 million euros, equivalent to just 0.59% of GDP, despite record contributions and increased employment.

Despite this slight deficit reduction in social security funds, overall economic growth played a significant role in reducing Spain’s public deficit in 2023. Spain grew an impressive 2.5%, five times more than the euro zone average. Additionally, employment reached a record high with a total of 21 million employed individuals in Social Security affiliates last year.

In summary, Spain’s financial landscape in 2023 displayed a mix of achievements and challenges as it continued to fulfill its commitments to Brussels while also reinforcing social protections and ensuring economic growth for its citizens.

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