The state coffers are increasingly emptying during the pandemic and the deficit shoots up at rates of 371%. According to the budget execution data for the first half of the year released this Thursday by the Ministry of Finance, the State deficit rose only to 48,787 million in the first half of the year, which represents 4.36% of the Gross Domestic Product and the aforementioned increase of 371% compared to June 2019. At that time, when the Government was not managing to hold the deficit to fulfill what was promised to Brussels, the imbalance was 10,346 million.
Those figures, already unbalanced, are history in the face of this year's diabolical evolution. State expenditures have increased in the first semester by 23.7% while revenues fall by 14.4%. Translated into figures, the State has spent 129,785 million until June, while revenues remain at 81,018 million .
From the European Commission and the IMF to the Bank of Spain, there is a general recommendation to increase the deficit this year to combat the pandemic and thus cushion the recession, but this need surprises Spain with one of the largest deficits in the European Union that is now shoot above most partners.
"All the data is affected by the declaration of the state of alarm and the numerous measures adopted by the Government for the management of the pandemic with the aim of mitigating the social, economic and labor effects of this emergency," says the Ministry led by María Jesús Montero in his statement. He attributes the sharp drop in income "to less economic activity as a result of the confinement measures taken to combat the virus." And he blames the expense "on the increase in health programs, as well as by the larger current transfers to Social Security and Autonomous Communities."
The Treasury admits that in the collection " practically all the tax figures recede" . VAT falls 18.1% "due to lower consumption due to the drop in activity and due to some of the measures taken to combat the pandemic, such as the application of the zero rate in VAT."
" The Corporate Tax falls by 10.6% and the Personal Income Tax by 28.7% as a consequence, to a large extent, of the higher deliveries on account, in addition to the stoppage of the activity. Finally, taxes on capital also fall 57.6% and social contributions 1.2% fundamentally due to the progressive replacement of active employees with the Passive Class System by others with the Social Security System ".
As for the Social Security funds "they mark a deficit of 1.15% of GDP due to the higher spending on benefits derived from the crisis."
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