Spain | Regional public accounts on the post-COVID horizon

Summary

This observatory analyses how regional public accounts may evolve towards 2022, with the aim of assessing the situation in which Regional Governments will find themselves once the crisis is over. To this end, different scenarios are considered, starting with the closing of the 2020 accounts.

Key points

• Key points:
• The pandemic has had an impact on the regional accounts, but less than expected due to the support of the central government.
• When that extraordinary aid disappears, the regions will once again record a persistent deficit.
• Part of the deficit forecast for 2022 will originate in the settlement of the regional financing system for 2020, which will be negative.
• The scenarios and projections analysed show that the evolution of the regional accounts is particularly sensitive to the effort to contain expenditure. The down payments mechanism means that the impact of the activity on the revenue of the common regime Autonomous Regions will have a lower impact in the short term.
• When the fiscal rules are applied again, beyond 2023, the Regional Governments will have a high level of indebtedness that will reduce their margin to undertake economic policies, if there are no additional measures to solve it.

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