Press Release 27/07/2022

PUBLIC ADMINISTRATION ACCOUNTS 2020

The deficit of the Public Administrations in the Basque Country stood at 6.5% of GDP in 2020, reaching 4,648 million euros

The deficit increased by 3,981 million euros compared to the previous year

In 2020, the Public Administrations (Basque Administrations, Provincial State Administration and Provincial Social Security) registered a deficit of 4,648 million euros, which was a rise of 3,981 million in respect of 2019 and represented 6.5% of GDP, 5.7 percentage points up on the previous year, according to data prepared by Eustat, in accordance with the criteria established by the System of National and Regional Accounts of the European Union (ESA-2010).

The increase in the negative balance of the Public Administrations in the Basque Country in 2020 was the result of the economic situation caused by COVID-19, which led to a drop in non-financial resources of 5.6%, i.e. 1,633 million less; and, on the other hand, a rise in non-financial spending of 7.8%, i.e. 2,348 million more than in 2019.

The same negative evolution of the balance was registered in the surrounding countries. Thus, in the 27-country European Union, the deficit in GDP percentage stood at 6.8%, up 6.2 percentage points on 2019. In Spain, the deficit grew by 7.2 percentage points, going from 3.1% of GDP in 2019 to 10.3% in 2020.

From the institutional point of view, the Basque Administrations (which include the Basque Government, Provincial Councils, Municipal Entities and dependent entities categorised as Public Administration) saw their balance decline by 1,574 million euros, going from having a funding capacity (surplus) of 769 million in 2019, to having a funding requirement (deficit) of 805 million in 2020.

A negative performance was also recorded for the Provincial Administration as a whole (State plus Social Security), whose funding requirement (deficit) increased by 2,406 million euros, going from a balance of -1,437 million in 2019 to -3,843 million in 2020.

In detail, the Provincial State Administration saw its positive balance or funding capacity fall from 732 million euros in 2019 to 76 million in 2020, mainly due to the rise in expenditure on transfers; specifically, the item for the Basque Country corresponding to the COVID fund was 568 million euros in 2020.

Furthermore, Provincial Social Security also posted a drop in its balance in 2020, registering a deficit 1,750 million euros higher than in 2019, owing to the fact that non-financial resources (primarily social security contributions) decreased slightly (by 0.08%), while non-financial spending was up 15.2%. In particular, social benefits (which mainly include pensions and unemployment benefits) increased by 12.5%, i.e. 1,397 million more, reaching 12,586 million in 2020. This sharp rise was the result of the measures on benefits adopted to mitigate the effects of COVID-19.

As regards the Basque Administrations, all the institutions included in this grouping saw a decrease in their balance. The funding capacity of entities of the Basque Government as a whole fell by 1,047 million euros, going from a positive balance of 363 million euros in 2019 to a negative balance of 684 million in 2020. This was due to the 4.8% decline in non-financial resources, standing at 11,030 million, and the 4.4% increase in non-financial spending, reaching 11,713 million.

The Regional and Municipal Administration of Álava overall posted a positive balance of 5 million euros, 31 million down on the previous year. Bizkaia went from registering a funding capacity of 213 million euros in 2019 to obtaining a funding requirement of 109 million in 2020. The funding capacity for Gipuzkoa as a whole also went from 157 million in 2019 to a deficit of 17 million in 2020.

The Public Administrations in the Basque Country managed non-financial resources totalling 27,695 million euros in 2020, 5.6% less than in 2019, whilst non-financial spending grew by 7.8% to 32,344 million. As a result, the funding requirement increased by 3,981 million euros in respect of the previous year and stood at 4,648 million in 2020.

Within Non-Financial Resources, Social Security Contributions recorded a slight rise of 0.1% (8 million more than the previous year), reaching 9,505 million in 2020, and remained the largest item (34.3% of the resources), as the other resources registered significant decreases. Taxes on Production and Imports were down 11.4%, standing at 7,991 million (28.9% of the resources), and Taxes on Income, Assets and Other Components fell by 4.2% to 7,528 million (27.2% of the resources). The combined drop in these two tax items amounted to 1,353 million euros less than in 2019. In short, non-financial resources decreased by 1,633 million in 2020 compared to the previous year.

Non-Financial Spending stood at 32,344 million euros, 2,348 million more than in 2019. All items saw an increase, except Property Income, which fell by 12.1% to 216 million (0.7% of expenditure). Social benefits different from social transfers in kind (including Social Security and social welfare benefits) registered the greatest increase of 12.0%, i.e. 1,479 million more than the previous year, and accounted for 42.7% of spending. Intermediate consumption recorded growth of 2.8% and Employee remuneration was up 2.1%, a combined increase of 269 million euros compared to 2019, representing 12.9% and 24.2% of expenditure, respectively. Capital spending (Gross Capital Formation, Capital transfers (to be paid) and Acquisitions of other assets) accounted for 6.8% of expenditure and increased by 190 million euros in respect of the previous year, reaching a total of 2,196 million. Subsidies (to be paid) rose by 61.3% to 996 million euros, 379 million more than in 2019.

In the final expenditure structure of the Public Administrations, Final Consumption Expenditure, which is the total expenditure by the administrations on the production of goods and services plus the purchase of goods and services produced by market producers which are supplied to households (social transfers in kind), represented 89.7% of Internal Public Demand in 2020, 0.1 percentage points up on the previous year. Gross Capital Formation (Public investment) reached 1,556 million euros, 2.9% more than the previous year.

Institutionally, 94.5% of investments corresponded to the Basque Administrations, which increased their expenditure by 15 million euros to 1,470 million in 2020. Furthermore, the amount corresponding to the Provincial Administration as a whole, State plus Social Security, stood at 86 million euros in 2020, up 29 million on the previous year.

For further information:

Eustat - Euskal Estatistika Erakundea / Basque Statistics Institute C/ Donostia-San Sebastián, 1 01010 Vitoria-Gasteiz Press Service: servicioprensa@eustat.eus Tel.: 945 01 75 62