Budget deficit

Disclaimer: I’m talking about public data. I don’t have any unpublished data.

In Spain there is some buzz recently about tax increases approved on December 30th. The government had changed and the new one said it was necessary to raise taxes because data said budget deficit where 8% GDP. The commitment was to finalize 2011 with a 6% GDP, from 9.2 previous year.

OK. Here is my take. We will end 2011 with more than 9% GDP. And here is my reasoning.

From what I know, public data about budget deficit appears on this page. As of January 10th, the more recent data are for federal government data (Estado) the November 2011 data, and for all public administrations, 2Q2011.

With November data for the federal government, you get a deficit of 52385 million euros for the 2011. But, in my opinion, to get the whole picture you have to take into account a twelve month period. Adding up December 2010, we would be talking of 64306 million euros. Around 6% GDP vs 4.8%GDP expected.

Similarly, data for all public administrations. Last data available is 2Q2011, with a deficit of 41348 for the 2011. But again you need a twelve month period. Adding 3Q2010 and 4Q2010, you get a total amount of 98283 million euros. Yes. At 2Q2011 the twelve month deficit was greater than at 2Q2010 (although on a percentage of the GDP it was a bit smaller).

Until we get updated data, deficit will end 2011 over 9% GDP.

EDITED (31/01/2011): It seems that public data 3Q2011 for all public administrations is out. 93786 million euros for a twelve month period. Using a GDP for 2011 of 1058701 million euros, deficit was 8,86% GDP.

First published here