Double economic decision of the Council of Ministers this morning. On the one hand, an exercise in economic realism that has forced the growth forecast for 2023 to be lowered, and on the other, an increase in the spending ceiling for next year that is 1.1% higher than the current one.
In terms of economic growth, the Government has reduced its forecast for next year by 8 tenths, leaving it at 2.7%, as a result of the impact of the war in Ukraine. According to the macroeconomic table presented by the First Vice President and Minister of Economy, Nadia Calviño, the GDP growth forecast for this year is maintained, which is 4.3%, but that of 2023 is lowered. The reasons for this lower growth are the high energy prices and the risks of gas supply to the European Union, the tightening of monetary policy, and the foreseeable economic slowdown in the euro zone and Germany.
"All organizations expect Spain to maintain strong growth in 2022, equal to or greater than 4%, and notable growth in 2023, around or above 2%", Calviño said, adding that they all calculate that "Spain will grow above the euro zone in 2022 and 2023".
Basically, this year's forecast holds up due to the pull of tourism and investment, but the slowdown is assumed in 2023.
On the other hand, the private consumption deflator, an indicator similar to that of inflation, rises to 7.8% this year and 2.9% in 2023. "The main challenge is inflation," Calviño acknowledged.
In addition, the Council of Ministers this morning approved the non-financial spending ceiling, which is the starting point for drawing up next year's budgets. It will be a new record, the third in a row, standing at 198,221 million euros, 1.1% above the 196,142 million euros this year. The figure of the expenditure ceiling supposes a limit that is established on the expenditure of public administrations to ensure, in this way, its control. It supposes the maximum of resources that can be assigned and that, later, will be detailed in the budgets.
At the same time as the spending ceiling, a public deficit target of 3.9% has been set for 2023, which represents a decrease of 1.1 pp compared to the 5% deficit this year. These are figures that will serve as a reference, but they will not be mandatory. For yet another year, European fiscal rules remain suspended, thanks to the activation of the so-called escape clause of the Stability and Growth Pact, to make it easier for countries to reactivate the economy after the pandemic.
"Since the start of the pandemic we will have reduced the deficit by more than 60%", said the Minister of Finance, María Jesús Montero, when setting the deficit target for next year. It is the jump that would mean going from the 10% deficit in 2020 to the 3.9% forecast for 2023. On the other hand, two tenths of the deficit margin has been increased for the autonomous communities so that they have more spending margin. Its reference rate goes from 0.1% to 0.3%, two tenths that the central administration will assume.
If the executive succeeds in approving the 2023 budgets, it will be the third in a row for the current coalition government. The Minister of Finance, María Jesús Montero, has stated that she hopes to approve next year's accounts "in a timely manner", so that it enters into force on January 1. With the spending ceiling approved, the first step has been taken.
