Public administrations registered a surplus of 0.8% of the Gross Domestic Product (GDP) in the first half of the year, according to data from the National Institute of Statistics (INE), made public this Friday.

Considering values ​​for the set of 1st half of 2022the AP balance [administrações públicas] was also positive (0.8% of GDP), with a expressive enhancement This indicator is not only compared with the same semesters of 2020 and 2021, marked by the COVID-19 pandemic, but also with respect to 2019”, reveals the INE.

For the first quarter of the year, the INE estimated that there was no surplus but a budget deficit of 0.4% of GDP. In the second quarter, seen in isolation and not in accumulated terms, a surplus of 1.9% was recorded. For this year, the Government forecasts a budget deficit of 1.9%.

First quarter of the year with a deficit of 0.4% of GDP

The result of the first semester results from an increase in revenues in 12.4% and a reduction in spending on 3%. The evolution of income is explained by the “recovery of economic activity”, as much as Work market in the post-pandemic and with the “effect of price rise“. As a result, tax revenues increased 20.7% while the contributions advanced 7.9% and sales 16.5%.

In the case of spending, the INE highlights the decrease in subsidies and interest charges, in 72.8% Y 11.4%respectively.

Source: INE

Health spending leads to a slight upward revision of the 2021 deficit to 2.9%

The deficit at the end of 2021 reached 2.9% of GDP at the end of last year, according to the report on excessive deficits, released by the INE. This figure was revised slightly upwards, 0.1 percentage point more than the data published in April, when a public deficit of 2.8% was expected last year.

The 2020 deficit stood at 5.8%. The organization explains that the revisions made to the 2021 data resulted from the revised incorporation into the accounts of the National Health Service (SNS). Expenses were revised upwards by €810 million, while revenues increased by €571 million. As a result of the changes, the final consumption expenditure of the Public Administrations was 240.7 million euros higher than initially estimated. As for the year 2020, spending was revised downwards by 269 million euros.

Fall in household savings

The household savings rate decreased 1.4 percentage points in the second quarter of the year compared to the previous quarter, which, according to the INE, was the consequence of an increase in private consumption of 2.7% above the growth of the disposable income (1, two%). The savings rate thus stood at 5.9% of gross disposable income.

These variables are in nominal terms, “which, in the case of private consumption, means that its evolution is marked by the acceleration of prices This is demonstrated by the behavior of the Consumer Price Index in the 2nd quarter of 2022, including the VAT paid by families”, highlights the INE.