Spanish State Deficit Falls 16% in March to 1.63% of GDP

The Spanish State closed the month of March with a deficit in national accounting terms of 17.09 billion euros (the equivalent of 1.63% of GDP). This is 16% lower than the figure posted in the same period of 2012.

According to the March 2013 Report on the Main Indicators of Economic and Financial Activity by the State, published last week, this figure compares with a State deficit equal to 1.95% of GDP to March 2012.

In cash accounting terms – an accounting method where receipts are recorded during the period they are received, and expenses are recorded during the period they are actually paid – the deficit stands at 18.84 billion euros (1.79% of GDP). This compares with a figure of 1.22% in the same month of 2012.

Before discounting the amounts paid to the regional authorities from Personal Income Tax, Value Added Tax and Special Taxes, total non-financial revenue to March amounted to 42 billion euros. This is a year-on-year reduction of 9%.

At 36.24 billion euros, total tax revenue posted a decline of 8.3%, as a result of a significant increase in tax rebates. However, when correcting for the different pace of tax rebate settlements in the two years, the adjusted tax revenue figures would reflect a 1.1% increase in the first quarter.

This positive trend is fundamentally the result of stimulation by regulatory measures and a favourable performance by both revenue corresponding to other periods and revenue corresponding to control activity.

Total revenue from direct taxes amounted to 17.27 billion euros (down 13.8%).

Revenue to March from Personal Income Tax amounted to 18.78 billion euros, 4.4% lower than a year ago. In adjusted terms, this reduction stands at 2.6%.

Total revenue from indirect taxes amounted to 18.97 billion euros (down 2.6% on 2012).

Revenue from VAT amounted to 13.95 billion euros (down 2.6%), which in adjusted terms represents an increase of 7.8%. Gross VAT rose by 5.7%, boosted by the 13.4% increase from the category of Large Companies, while revenue from SMEs (small- and medium-sized enterprises) fell by 51.4%.