Fiscal Policy Strategy

Transcription

1 Fiscal Policy Strategy 22th Dec 2015

2 Employment (thousands. Q4 and 15Q3) Structural features of the Spanish economy Direct investment position abroad (as % GDP) Source: INE T3 GDP per capita (PPS) Dif. 2015Q Dif. 2015Q Employees 18, , , , , Q Q2 Dif. 2015Q Spanish FDI abroad (as % GDP) Source: Banco de España (IMF BPM5; BPM6) Source: Eurostat GDP per cápita Dif ,500 24,600 24,600 25,

3 Macroeconomic scenario Year on year % change f 2016f 2017f 2018f Real GDP GDP deflator Private Consumption Public Consumption Gross Fixed Capital Formation Domestic Demand(*) Exports of goods and services Imports of goods and services External Demand(*) Employment (**) Unemployment rate (average) Employees affiliated to the Social Security Net lending (+)/ borrowing (-) vs RoW (***) Public sector net lending (+)/ borrowing (-) (***) (Nov) (*) Contribution to GDP growth; (**) full -time equivalent (***) % GDP Real GDP (y-o-y % change ) Banco de España (December2015) Real GDP (y-o-y % change ) National Consensus (November 2015) 2015f 2016f f 2016f Source: MINECO, MINHAP. (*) Contribution to GDP growth; (**) full -time equivalent. (1) Net of financial sector assistance one-off (2014: 0,11pp, 2015f 0,03pp) 2

4 Real GDP growth (y-o-y %) Economic growth differential Euro area Advanced economies (G7) Spain * * * Source: INE, PGE 2016, IMF (WEO October 2015), and European Commission (Autumn forecast 2015). 3

5 External indebtedness stability and risk premium and deficit reduction Source: Banco de España, MINHAP Q2 Net financial liabilities

6 Fiscal consolidation and lending capacity Net lending (+) or net borrowing (-) by institutional sector (% GDP) Source: INE, IGAE and Draft Budgetary Plan 2016 (sept. 2015) (% GDP) Q2 2015f 2016f 2017f 2018f Net lending (+)/ borrowing (-) visà-vis RoW

7 Private debt reduction vs public debt and external indebtedness Net financial liabilities(% GDP) (% GDP) Q1 Q2 Net liabilities Public Sector Net liabilities non fin. Private Sector Net liabilities vis a vis RoW Source: Banco de España 6

8 Financial account stability Financial account Inflows (+) outflows (-) Direct Investment Portfolio Investment (% PIB) (Jan-Sep) NCL NCA NCL-NCA Source: Banco de España. BPM6. NCL-NCA

9 Outturn and budgetary stability targets Net lending (+)/net borrowing (-) ( % of GDP) Stability Targets (D) 2014 (P) Central Government Regional Governments Local Governments Social Security General Government Source: IGAE. MINHAP. Excluding financial sector assistance Excluding 2009 Settlements of the regional financing system 8

10 Fiscal effort International comparison Fiscal effort (Change in the cyclically adjusted primary balance, % potential GDP) Source: IMF, Fiscal Monitor Oct 15 9

11 Deficit reduction 2014 vs 2011 y and consolidation path (% GDP) Central Government Regional Governments Local Governments Social Security General Government Adjustment Adjustment 2018 vs 2014 vs Total Adjustment Excluding financial sector assistance Excluding 2009 Settlements of the regional financing system Source: IGAE. MINHAP. 10

12 General Government and subsectors outturn balances Net lending (+)/net borrowing (-) (%GDP) Cambiar en grafico comas por puntos (y-o-y % change) f 2016f GDP (volumei Source: IGAE, MINHAP. Net of financial sector assistance one-off. Excluding Settlements of the regional financing system for

13 Regional Governments outturn balances Net lending (+)/net borrowing (-) (% regional GDP) 2010** 2011** (D) 2014 (P) Target 2014 Andalucía Aragón Asturias Baleares Canarias Cantabria Castilla-La Mancha Castilla y León Cataluña Extremadura Galicia Comunidad de Madrid Región de Murcia* Comunidad Foral de Navarra La Rioja Comunidad Valenciana País Vasco Total Regional governments * National Accounts data before considering the effect of the earthquake in Lorca, Murcia, for evaluating target compliance ** Excluding Settlements of the regional financing system for Source: IGAE. Ministry of Finance and Public Administration 12

14 Regional Fiscal Balances evolution Net lending (+)/net borrowing (-)* (% regional GDP) *National Accounts data before considering the effect of the earthquake in Lorca, Murcia, for evaluating target compliance. Excluding 2009 Settlements of the regional financing system for Source: IGAE. Ministry of Finance and Public Administration 13

15 Net lending (+) / Net borrowing (-) EDP % of GDP Source: IGAE Local Governments Budget Balance (D) 2014 (P) Local Governments Non-financial budget balance* Barcelona Madrid , ,331.2 Málaga Sevilla Valencia Zaragoza Total , , ,818.4 * General administration of local governments and its autonomous bodies budget execution advance 4Q data. Source: Ministry of Finance and Public Administrations M 14

16 Revenue National Accounts Source: IGAE, INE and MINHAP. 15

17 Total Tax revenues (Bn ) forecast Personal Income Tax % Corporate Income Tax % CIT Instalment payments Evolution of Tax revenues Large corporations and groups % SMEs % Other Total % Other % Chapter I.- Direct Taxes % Vat % Excise Taxes % Other % Chapter II.- Indirect Taxes % Chapter III.- Other Tax revenues , % Total Tax Revenues % % 15/14 Source: AEAT. 16

18 Taxable base Taxable base and national demand (current prices, y-o- y % change) (y-o-y % change) f 2016f Taxable base 2,6 3,8 5,2 National Demand 1,7 3,3 4,0 Source: MNECO, MINANP 17

19 Tax bases and revenues % change (y-o- y) f 2016f 2015 ( I a III TR) III TR Tax bases On income Gross household income Corporate income tax base On expenditure Final expenditure subject to VAT , Consumption subject to excise duties Total tax bases on income and expenditure ,4 9,3 2,9 2,9 27,0 27,4 3,1 3,4 4,5 4,4-3,4-1,2 5,0 7,0 AEAT (cash) Tax revenue - VAT Large Corporations (Gross) % Jan-Nov VAT SMEs (Gross) Income tax Instalment payments of Personal enterprises Source: AEAT 12.7 IGAE (national accounts) Taxes on production and imports Source: IGAE % Jan-Nov VAT 7.8 Taxes on income and wealth 5.0 Total taxes

20 Evolution in CIT revenue CIT Instalment payments. ( M ) A Large corporations & Groups 7,626 11,636 14,692 15,905 18,878 Consolidated Groups 3,430 6,338 9,194 10,062 11,904 (M ) Large corporations 4,196 5,298 5,498 5,843 6,974 SMEs 1,872 1,758 1,485 1,595 1,900 Other revenues TOTAL 9,634 13,609 16,296 17,425 21,000 (y-o-y % change) A Large corporations & Groups Consolidated Groups (y-o-y % change) Large corporations SMEs Other revenues TOTAL Source: AEAT 19

21 Fight against fraud Form 720: Reporting statement of properties and rights situated abroad Fight against fraud results (M ) Tax year Reporting Taxpayers Value of properties declared( M ) ,927 90, First-time declared right or property Right or property previously declared Right or property revoked or extinct First-time declared right or property Right or property previously declared Right or property revoked or extinct 32,768 20,790 29,254 70,333 29,815-15,942 28,565 14,766 30,639 46,067 26,576-12,684 Source: AEAT Form 750: Special Tax Return Tax year Num of Taxpayers Resulting amount payable ( ) ,683 1,193,598,829 20

22 Expenditure National Accounts Source: IGAE, INE and MINHAP. Expenditure not including financial assistance one-offs. 21

23 Net lending (+)/net borrowing (-) (Million ; %GDP) Fiscal balances oct-14 oct-15 oct oct 15/14 oct-14 oct-15 oct Million y-o-y % % GDP Change p.p Central Government -27,286-21,637 5, Regional Governments -13,390-12, Social Security ,702-2, Balance General Gov.* -40,925-36,934 3, Revenue General Gov.* 301, ,358 10, Expenditure General Gov* 342, ,292 6, (*)General Government excluding Local governments; Central gov.expenditure excluding financial aid ( amd ) Q Q Q Q3 15/14 Q Q Q Million y-o-y % % GDP Change p.p Local Gov. Balance 4,185 3, nov-14 nov-15 nov nov 15/14 nov-14 nov-15 nov Million y-o-y % % GDP Change p.p State Balance (Estado) -35,372-27,523 7, State revenue 155, ,001 7, State expenditure 191, , Primary balance -7, , Source: IGAE 22

24 Fiscal consolidation: General Government consumption and public employment General government consumption (y-o-y %) Government M consumption , , , , ,236 M (-7.8%) Public sector employees (thousands) : +11.4% : -9.9% Source: INE, current, not seasonally adjusted NA Source: INE, LFS Q

25 Compensation of employees Intermediate consumption Social transfers other than in kind Main items of expenditure General Government Million General Gov General Gov General Gov General Gov General Gov General Gov Y-o-y Y-o-y Y-o-y Y-o-y Y-o-y Level Level % Level % Level % Level % Level % 107, , , , , , ,226 61, , , , , , , , , , , Social transfers in kind supplied via market producers 26,026 31, , , , , Interest expenditure 16,892 20, , , , , Subsidies 11,857 12, , , , ,4 5.0 Gross fixed capital formation Government Consumption Source: IGAE 49,467 50, , , ,753-12,1 21, , , , , , ,

26 Taxes on production and imports Main items of revenue General Government Million General Gov General Gov General Gov General Gov General Gov General Gov Y-o-y Y-o-y Y-o-y Y-o-y Y-o-y Level Level % Level % Level % Level % Level % 124, , , , , , Taxes on products 112,963 95, , , , , Taxes on production 11,669 14, , , , , Current taxes on income and wealth -Paid by households and non assigned 137, , , , , , ,83 80, , , , , Paid by corporations 50,796 20, , , , , Social Contributions 136, , , , , , Source: IGAE 25

27 Real per capita expenditure euros base 2013 Expenditure (net of financial assistance) Primary expenditure (net of financial assistance) % change Expenditure (net of financial assistance) % change Primary expenditure (net of financial assistance) Source: IGAE ,526 7, % 3.0% ,632 7, % 1.7% ,797 8, % 2.9% ,825 8, % 1.2% ,047 8, % 3.5% ,131 8, % 1.5% ,350 8, % 2.8% ,696 9, % 3.9% ,164 9, % 5.1% ,767 10, % 6.0% ,668 10, % -1.3% ,424 9, % -3.6% ,903 9, % -6.3% ,856 9, % -1.3% ,969 9, % 0.7% ,025 9, % 1.0% ,981 9, % 0.2% ,991 9, % 0.4% 2018 Fuente: IGAE 10,030 9, % 0.6% % 2018/ % 3.0% 26

28 Expenditure by function and real per capita expenditure growth General Government expenditure by function 2007 Expenditure (%GDP) 2013 Expenditure (%GDP)* 2015 Expenditure (%GDP) 2016 Expenditure (%GDP) Expenditure Difference p.p. GDP Real per capita Expenditure % change General Government (S.13) 01 General public services Defense Public order and safety Economic affairs Environmental protection Housing and community amenities Health Recreation, culture an religion Education Social protection Total expenditure (*) Excluding financial assistance Source: INE, MINECO, MINHAP, Draft Budgetary Plan 2016 (sept. 2015) 27

29 Main items of expenditure Central Government Million (D) 2014 (P) Central Central Central Gov. Gov. Gov. Central Gov. Central Gov. Central Gov. % % % Level Level Level Level change Level change Level change Compensation of employees 21,622 24,461 23,951 22, , , Intermediate consumption 8,712 9,003 9,144 8, , , Social transfers other than in kind 12,200 14,993 14,480 14, , , Social transfers in kind supplied via market producers 1,144 1,725 1,471 1, , , Interest expenditure 14,366 18,348 22,836 27, , , Subsidies 2,733 2,862 2,863 2, , , Gross fixed capital formation 14,656 15,006 12,555 9, , , Source: IGAE 28

30 Main items of expenditure Regional Governments (D) 2014 (P) Regional Gov. Regional Gov. Regional Gov. Regional Gov. Regional Gov. Regional Gov. % % % Level Level Level Level change Level change Level change Compensation of employees 64,405 75,590 74,081 68, , , Intermediate consumption 25,421 29,617 30,020 28, , , Social transfers other than in kind 23,763 28,517 27,789 25, , , Social transfers in kind supplied via market producers Million 2,543 4,162 4,055 3, , , Interest expenditure 2,590 3,409 5,135 5, , , Subsidies 3,756 3,981 4,039 3, , , Gross fixed capital formation 20,056 19,798 16,690 11, , , Source: IGAE 29

31 Main items of expenditure Local Governments (D) 2014 (P) Local Gov. Local Gov. Local Gov. Local Gov. Local Gov. Local Gov. % % % Level Level Level Level change Level change Level change Compensation of employees 18,989 22,102 21,913 20, , , Intermediate consumption 18,689 21,135 20,897 19, , , Social transfers other than in kind 0,612 0,855 0,901 0, , , Social transfers in kind supplied via market producers Million 0,459 0,632 0,696 0, , , Interest expenditure 1,129 0,761 0,975 1, , , Subsidies 1,504 1,754 1,640 1, , , Gross fixed capital formation 14,315 15,504 10,111 5, , , Source: IGAE 30

32 Main items of expenditure Social Security (D) 2014 (P) Soc. Sec. Soc. Sec. Soc. Sec. Soc. Sec. Soc. Sec. Soc. Sec. % % % Level Level Level Level change Level change Level change Compensation of employees 2,429 2,731 2,656 2, , , Intermediate consumption 1,404 1,295 1,231 1, , , Social transfers other than in kind 108, , , , , , Social transfers in kind supplied via market producers Million 0,660 0,684 0,582 0, , , Subsidies 3,864 3,757 3,662 2, , , Gross fixed capital formation 0,440 0,385 0,282 0, , , Source: IGAE 31

33 Public Sector Reform Accountability Transparency Expenditure rule, debt ceiling and target deficit of all levels of government. Reduced risk of breaching rules by the followup procedure of the Payments to Suppliers General State Controller provided with new instruments (adjustment plans and Treasury adjustment), in exchange for liquidity (Liquidity mechanisms). Budgetary control reinforced by mutualisation of the Regional and Local government's debt. Independent assessment of effective compliance of the budget stability principle (AIREF). Recovery of the Local government civil servants with national qualification. Monthly reporting on the budgetary execution. Publication of the Economic and Financial rebalancing plans. Institutionalization of national accounts compiling. (Technical Committee of National Accounts). Providing new information such as: period of payment to suppliers,treasury plans, staff, health expenditure, Public sector bodies... Sanctions regime derived from the non compliance with the provision of information. Local Entities competences are limited depending on the financial resources at their disposal. New regime includes new criminal offenses (penal code reform) and administrative (Transparency Law). 32

34 Liquidity measures Total amount of Liquidity mechanisms to Local and Regional Governments: bn : bn 2015: 51.1 bn Suppliers payment financing plan: 41.8 bn 2012: 27.3 bn 2013: 6.5 bn 2014: 8.0 bn ICO line 2012: 5.4 bn Liquidity Fund: 62.8 bn 2012: 16.6 bn 2013: 22.9 bn 2014: 23.2 bn Other measures: 23.9 bn 2012: 10.6 bn 2013: 7.8 bn 2014: 5.5 bn Financing Funds: 39.9 bn Financial Facility: 14.3 bn Liquidity Fund: 22.9 bn Social Fund: bn Remaining Financing Funds: 0.992bn Fund for financing Local Govs.: 1.0 bn Other measures 2015: 11.2 bn 70% 70% of the total of the liquidity measures intended to fund Social Policies 33

35 Total Liquidity to CCAA y EELL LIQUIDITY MECHANISMS GRANTED TO LOCAL AND REGIONAL GOVERNMENTS, YEARS 2012, 2013, 2014 y M TOTAL LIQUIDITY 2012 TOTAL LIQUIDITY 2013 TOTAL LIQUIDITY 2014 TOTAL LIQUIDITY 2015 TOTAL LIQUIDITY ANDALUCIA 10, , , , , ARAGON , , CAST. LA MANCHA 5, , , , , CASTILLA - LEON 1, , , CATALUÑA 12, , , , , CANARIAS 1, , , , , EXTREMADURA , GALICIA , , C. VALENCIANA 14, , , , , ASTURIAS , BALEARS (ILLES) 2, , , , , CANTABRIA , MADRID 4, , , MURCIA 2, , , , , RIOJA (LA) PAIS VASCO NAVARRA Ceuta TOTAL in the Regions* (distributed) 58, , , , , Regions (to be distributed) Total in the Regions* 58, , , , , Local governments ** 1, , , Total liquidity mechanisms Regional and Local Governments 59, , , , , * Including suppliers financing plan by Local Entity in the region. ** No including Local Entities suppliers financing plan. 34

36 Total financing to suppliers TOTAL FINANCING TO SUPPLIERS (Financing Funds to CCAA y EELL) M AÑO 2015 TOTAL ANDALUCIA 7, , , , ARAGON , CAST. LA MANCHA 3, , , CASTILLA - LEON 1, ,280,71 CATALUÑA 4, , , , , CANARIAS 1, , EXTREMADURA GALICIA C. VALENCIANA 6, , , , , ASTURIAS BALEARS (ILLES) 1, , CANTABRIA , MADRID 3, , , MURCIA 1, , , RIOJA (LA) PAIS VASCO NAVARRA Ceuta TOTAL in the Regions* (distributed) 33, , , , , * Including suppliers financing plan by Local Entity in the region. 35

37 Territorial funding M 2015* 2016 % 2016/2015 Territorial funding 102, , % Regional Governments funding 85,332 92, % Local Entities funding 17,214 17, % * 2015 (final settlement 2013) 36

38 2015* 2016 Regional funding Total funding % 2016/15 Cataluña 15, , , % Galicia 6, , % Andalucía 15, , , % Principado de Asturias 2, , % Cantabria 1, , % La Rioja % Región de Murcia 2, , % C. Valenciana 8, , % Aragón 2, , % Castilla-La Mancha 4, , % Canarias 3, , % Extremadura 2, , % Baleares 2, , % Madrid 11, , % Castilla y León 5, , % Total Regions 85, , , % Melilla % Ceuta % Ceuta and Melilla % * 2015 liquidación definitiva Total 85, , , % * 2015 (final settlement 2013) M 37

39 Savings from liquidity measures Interest Savings 2015 Interest Savings 2016 Operation term savings Andalucía , Aragón Asturias Baleares Canarias Cantabria Castilla la Mancha , Castilla y León Cataluña 1, , , Extremadura Galicia La Rioja Madrid Murcia Valencia , Total Regions 3, , , M 38

40 Public debt by subsector Public debt (%PIB) Source: Banco de España. 2015: third quarter. 39

41 Debt of Regions and local governments ( % of GDP) Debt of regional and local governments Source: Banco de España, 2015 : third quarter 40

42 Commercial debt Commercial Debt incurred by Public Administrations (M ) Source: Banco de España 41

43 Drivers of public debt growth f General Government debt Change in public debt Factors of debt growth : Drivers of public debt growth ( % of GDP) Primary deficit Interest expenditure Financial sector recapitalisation Financial Funds to territorial gov FADE EFSF (lending to Greece, Irl.,Port) Others Contribution of change in nominal GDP Source: Banco de España and MINHAP, Draft Budgetary Plan 2016 (sept. 2015) 42

44 Corporate deleverage and market capitalization Savings and Investment of Non-Financial corporations (as % GDP) Non Financial corporations (M ) Non financial corporations (M ) Jan-12 Oct-15 Dif. M Dif. % Indebtedness (Stock) 1,194, , , Madrid Stock Exchange market cap. 442, , , Source: INE Source: Banco de España 43

45 Household deleverage and financial wealth Savings and Investment of Households (as % of GDP) Household Deleverage and Financial Wealth (M ) Households (M ) Jan-12 Oct-15 Dif. M Dif. % Indebtedness (gross) 867, , , Q4 2015Q2 Dif. M Dif. % Financial wealth 822,431 1,259, , Source: INE. Source: Banco de España 44

46 New loans and long term government bond yield Loans. New business. Total (y-o-y % change) Loans. New business. Households and non financial corporations up to 1M. (y-o-y % change) 10-Y Government bond yield (monthly average %) Loans. New Business. (y-o-y %) Source: Banco de España (Jan-Oct) Spain Euro Area Loans. New Business. Households and Non financial corp. <1 M (y-o-y %) (Jan-Oct) Spain Euro Area Y Government bond yield 10-Y spread over German bond(pp) (Nov)

47 Households. New loans New Loans. Total Households. (y-o-y % change) New Loans. Households- House purchase (y-o-y % change) New Loans. Households- Consumption (y-o-y % change) New Loans. Total Households Source: Banco de España (Jan-Oct) Spain Euro Area New Loans. Households- House purchase (Jan-Oct) Spain Euro Area New Loans. Households- Consumption (Jan-Oct) Spain Euro Area

48 Price stability and competitiveness Unit Labour Cost (Base year 100=2010) Harmonised Consumer Price Index (y-o-y % change) Source: OECD Source: Eurostat (*) Average data in the current period over the same average past year. 47

49 Trade balance, crude oil and exchange rate Energy and non-energy trade balance (M ) Brent oil Price $ per barrel Exchange rate($/ ), and real effective exchange rate (index) Trade balance (M ) (Jan- Oct) Non-energy -5,179 15,790 25,965 15,368 3, (Nov) 2015f Energy -41,159-46,547-41,920-39,840-23,728 Total -46,338-30,757-15,955-24,472-20,530 Balance of Payments (% GDP) Goods y Services (Jan- Sep) Imports Exports Total Brent oil Price $ per barrel (Jan-Nov) 2015f Exchange rate $/ Real effective exchange rate Source: Customs Service, Banco de España and European Central Bank (Oct) -

50 Structural reforms STRUCTURAL REFORMS PUBLIC SECTOR REFORMS FINANCIAL SECTOR REFORMS Reforms 2012 Labour Market Health sector Education Budgetary framework Budgetary Stability Law Financial Sector SAREB Pension System Reform Single Market Local Administrations Reform Regulatory Bodies. CNMV Recapitalizing Reforms 2013 Energy sector Entrepreneurs Act e- invoicing CORA New Taxation for entrepreneurs R+D+i Commercial debt Act Average payment period Restructuring Reforms 2014 Active employment policy measures and youth guarantee Social Security flat rate Independent Authority for Fiscal Responsibility New Legal framework for Financial Disintermediation Reforms 2015 Active Policies Second Chance Act Tax Reform Reduction of S.S. Contributions Insolvency Regime 49

51 Correction of imbalances in a stable macroeconomic framework Net lending (+) or borrowing (-) vis-à-vis ROW, inflation % and real GDP annual % change Source: INE and Budgetary Plan 2016 (sept 2015) 50

52 Correction of imbalances: unemployment rate vs net lending or borrowing v-á-v RoW Net lending (+) or borrowing (-) vis-à-vis ROW and unemployment rate. Source: INE, Eurostat and PGE

53 Contribution to GDP Growth Domestic demand, external demand contributions and annual % change in affiliated to Social Security, tax revenues and real GDP (quarterly data) Source: AEAT, INE and MEYSS ( y-o-y %) 2014 average (last data) Real GDP Q4 3.4 (Q3) Social Security Affiliated Dec 3.2 (Nov) Tax revenues (homog.) Jan-Dec 4.7 (Jan-nov15) 52

54 Contributions to economic growth Contribution to national demand and its components to GDP growth (pp and y-o-y % change) Contributions (pp) 2015Q3 Real GDP (y-o-y %) 3.4 National Demand Final consumption expenditure 2.6 F.C.E. Private sector 2.0 F.C.E. Government 0.6 -Gross capital formation 1.3 G.F.C.F. Construction 0.6 G.F.C.F. Equipment 0.7 G.F.C.F. Rest 0.1 External Demand -0.5 *Last date: GDP 2015Q3 Source: INE 53