Government to revise upward last year’s public deficit figure

The government will have to revise upward the deficit figure of 8.51 percent of GDP last year after the latest budget execution figures for a number of key regions showed a bigger shortfall than previously stated.

It was revealed Friday that the Finance Ministry has ordered the State Public Accounts Department to revise the figure based on the 2011 figures included in the financial equilibrium plans of the regions approved on Thursday by the Fiscal and Economic Policy Council.

One of the regions most affected is Madrid, which had earlier declared a shortfall of 1.1 percent of GDP, safely within the target set by the central government of 1.3 percent of GDP. However, regional premier Esperanza Aguirre in February warned that the figure would have to be revised upward. Revenues had been overstated by some two billion euros, meaning that the deficit was 2.2 percent, double the original figure.

Given that Madrid represents 17.8 percent of Spain’s GDP, this will have an impact on the shortfall for the whole of the country’s public administrations.

The equilibrium plans for Valencia and Castilla y Léon also showed bigger deficit than initially stated, 869 million euros in the case of the former and 137 million for the latter.

On taking power in December of last year, the Popular Party government said the deficit had overshot the target of six percent of GDP by over two percentage points. The 8.51-percent figure had been confirmed by the European Commission.