Duda of the measures to be taken by the Government to correct deviations of the deficit and said that uncertainties about are “notable”
MADRID , 1 (EUROPA PRESS)
the Bank of Spain expects the public deficit to stand at 4.4% of GDP in 2016, up 1.6 percentage points above the target agreed for this year, 2.8%. This figure would represent an adjustment of 8/10 compared to the end of 2015 (5.16%), this is about 8,000 million euros, but would not meet an additional adjustment of 16,000 million, twice.
in addition, the institution governed by Luis María Linde expects that the negative balance of public accounts is maintained at 3.4% of GDP in 2017, compared with 1.7% forecast for this year.
the Director General of Economics and Statistics from the Bank of Spain, Pablo Hernández de Cos, argues that the deviation of the deficit in 2015 does not have a priori an impact on the economy, just as the figures provided by the institution “are consistent with a economic growth of 2.7% in 2016 “.
However, the institution warns that to the extent that these deviations should be corrected in the coming years applying fiscal consolidation measures, these” could have negative effects in the short term, although they are necessary “.
when explain deviations planned for 2016 and 2017, Hernández de Cos has indicated that the public deficit part this year of a” deviation significant “in 2015, which” has effects that are transferred to the following years. “
As indicated by the Bank of Spain said in its macroeconomic projections for the Spanish economy,” doubts “over the course of fiscal policy throughout 2016 and 2017 are “remarkable” and even more so since the Ministry of Finance yesterday announced that the deficit in 2015 rose to 5.16% of GDP, one point more than 4.2% committed with Brussels.
According to the monetary authority, “there is uncertainty about the response they end up giving national authorities” to the recent autonomous recommendation of the European Commission, in which it asks Spain to take budgetary measures additional restrictive to those incorporated in the budget plans.
pROJECTIONS oF iNCOME AND EXPENSES.
on the revenue side, the Bank of Spain has made these deficit projections taking into account the impact in 2016 of the second tranche of the reduction of corporate tax, which came into force on 1 January 2015 and the lagged effects of the reform of personal income tax purposes; while on the expenditure side, the projections take into account the rise of 1% of salary for civil servants, the payment of the second half of the bonus and the increase in the average replacement rate effective in 2016, to 50% in general and 100% for priority sectors.
by 2017, the Bank of Spain assumes a revaluation of salaries of public employees and maintaining a path of moderation of new government contracting. On Social Security, incorporates the pension increases of 0.25% in both 2016 and 2017, linked to the application of the formula of indexation of pensions in force since 2014.
In addition to these measures, the assumptions of the Bank of Spain on government deficit incorporate some containment of public investment and a reduction in transfers and subsidies and spending on unemployment benefits due to labor market dynamics, plus a cut the interest burden on the most favorable financial conditions.
Finally, indicates that measures to correct the deviation of the deficit in 2015 announced yesterday by the Ministry of Finance have not been considered in these projections because it has not been enough time to evaluate them
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