The deficit falls but fails to meet the challenges ahead

Summary

The public deficit in Spain was reduced by half a percentage point of GDP to 2.5% in 2018, above the drop predicted by BBVA Research, confirming the repeated failure to meet its stability target (-2.2% of GDP).

Key points

• Key points:
• If we set the share of the deficit that evolves in line with the economic cycle to one side, the estimates suggest that during 2018 the primary structural balance underwent a decline of five percentage points of GDP.
• The budgetary execution data up to February 2019 indicate a worsening of the deficit mainly due to the moderation of public revenue.

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