UTAO warned today that state spending fell short of what was authorized last year, highlighting the under-execution of investment, while tax and contributory revenue was more favorable than expected.
In an analysis of the public accounts between January and December 2023, the Technical Budget Support Unit (UTAO) explains that the State recorded, after adjustments, a budget surplus of 4,398 million euros in 2023.
The surplus in public accounts (from a national accounting perspective, the one used in international comparisons, will only be released by the National Statistics Institute at the end of March) “significantly” exceeded the objective of the State Budget (SB) and the updated estimate.
According to the unit that provides support to MPs, the data indicates a “more favorable than anticipated evolution of tax and contributory revenue, with expenditure remaining below what was authorized, in which the under-execution of investment in relation to the approved State Budget stands out”.
The experts point out that “the provisional result for 2023 constitutes a more favorable starting point for the implementation of 2024 and the budgetary objective that is to be achieved this year.”
UTAO estimates that the general government budget result at the end of December “reflects a favorable deviation of 7.442 million euros” compared to the SB2023.
This picture is the result of the “more benign” evolution of tax revenue (5.591 million euros) and contributions (1.892 million euros), with expenditure remaining “globally below what was authorized (4.300 million euros), especially investment (2.562 million euros)”.
In the opposite direction, it highlights the under-execution of capital revenue (-2.285 million euros) and “other current revenue” (-2.023 million euros). In terms of expenditure, “only personnel costs (-873 million euros) and current transfers (-1,647 million euros) exceeded the forecast”.
The UTAO also points out that, when compared to the benchmark estimate for 2023, the size of the deviation was reduced (2,078 million euros), but the level of expenditure remained globally below the updated target (3,022 million euros) and the collection of tax and contributory revenue above it (by 1,739 million euros).
“Investment (712 million euros) and the non-tax and non-contributory component of revenue (2.438 million euros) remained under-executed, even after the sharp downward revision of the annual target,” he says.
The UTAO recalls that in its analysis of the SB2024 it considered that the Ministry of Finance presented an “excessively conservative perspective in estimating the tax and contributory component of revenue and, in the opposite direction, the danger of under-execution” of investment, especially the Recovery and Resilience Plan (PRR) and the revenue that finances it.
