Spain’s Economic Rebound: A Look at the 2023 Financial Year

Spain meets deficit goal and finishes 2023 with 3.64% GDP.

In 2023, Spain closed its financial year with a public deficit of 3.64% of GDP including financial aid, slightly lower than the provisional 3.66% reported last week by Minister of Finance Mara Jess Montero. The Ministry stated that the data changed minimally after receiving the definitive national accounting data, with the deficit standing at 3.65% excluding financial aid.

Despite reducing its deficit by over 60 billion euros since the start of the pandemic in 2020 and expanding public services, Spain reinforced its Welfare State and social protections to combat the effects of the war in Ukraine. The Social Security system closed 2023 with a deficit of 8,627 million euros, equivalent to 0.59% of GDP, despite record contributions and increased employment.

The closing data for 2023 show a negative balance of 8,211 million euros, equivalent to 0.56% of GDP, for the Social Security Funds, which include the Salary Guarantee Fund (Fogasa) and the Spanish Public Employment Service (SEPE). Social Security received 43,908 million euros in transfers last year, showing a 2.8% increase. Overall, Spain’s financial landscape in 2023 displayed a mix of deficit reduction, economic growth, and reinforcement of social protections.

Spain has fulfilled its commitments to Brussels for four consecutive years by meeting and even surpassing the forecasted deficit reduction target committed to Eurostat with an official closing data that is below what was initially reported.

Employment also played a significant role in Spain’s success as it recorded a record number of Social Security affiliates reaching 21 million employed individuals in spite

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