Public finance

Catalan Government estimates Catalonia's fiscal deficit to be almost €20.2bn

Executive estimates fiscal deficit has gone from 8% of GDP in 2016 to 8.5% in 2019

BarcelonaThe Catalan government estimates that Catalonia's fiscal deficit in 2019 was €20.2bn, the equivalent of 8.5% of Catalan gross domestic product (GDP), according to calculations by the Catalan Department of Economy and Finance. The data shows a deepening of the Catalan fiscal deficit compared to the last published figures, from 2016, when the deficit was €17bn and was equivalent to 8% of GDP.

The data corresponds to one of the systems for calculating fiscal balances, that of monetary flow, and has been calculated with an estimate on a quarter of the State's expenditure in Catalonia, since the Spanish Government has not provided data on its region-by-region expenditure. Although the Generalitat prefers the monetary flow system, it has also estimated the fiscal balance with the other usual method, the profit burden. In this case, the resulting deficit for 2019 is €14.6bn, 6.1% of GDP, when in 2016 by this method the deficit was €12.2bn, 5.7% of GDP.

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Therefore, the fiscal deficit according to the money flow method has increased by 18.45%. This increase, as explained by the general director of Financing, Montserrat Bassols, is due to the fact that the share of the income Catalonia contributes to the State has gone from 19.2% to 19.6%, while the expenditure has remained at 13.4%.

Giró: "Mistreatment by the State"

Catalan Economy and Finance minister Jaume Giró believes the data shows "economic mistreatment of the State in Catalonia is systematic, endemic and disloyal". Giró added that the fiscal deficit made €20bn generated in Catalonia "evaporate", and they could not be invested in services and equipment due to the poor execution of the investments budgeted by the State in Catalonia (35.7%), and to the liquidation of the autonomic financing in 2020, in which Catalonia was the second community that contributed the most and the fourteenth in resources received per capita.

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For Giró, the fiscal deficit obeys a strategy of "political control of a country that wants to make its voice heard" using tactics of withholding resources that are equivalent to 53% of the Generalitat's entire 2022 budget, that is, the equivalent to the budget for health, education and social rights.