General Budgets for 2022
Updated on Wednesday, 13 October 2021 – 15:34
Act of delivery in the Congress of the PGE for 2022. Budgets 2022 The “prudent” forecast of the Government: 17,000 million more in taxes before its great fiscal reform Direct This is the fine print of the General Budgets for 2022, item by item
The monetary package deployed by the European Central Bank (ECB) to help countries in the face of the pandemic allows the paradox that the volume of Spanish debt in circulation increases but the interest paid for it decreases. The government predicts reduced by 1,480 million euros with respect to the previous year “as a consequence of the decrease in interest rates on new issues, in line with the evolution of the interest rates in force in the market”.
This is stated in the draft General State Budget for 2022 that the Minister of Finance, Mara Jess Montero, has delivered this Wednesday in the Congress of Deputies. According to the text, the financial expenses of the State amount to 30,223 million euros and decrease by 4.7% compared to 2021; 97.5% of these expenses correspond to interest on the public debt in euros, that is, almost 29,500 million euros.
The purchase program implemented since March 2020 by the ECB has facilitated during all these months the financing and refinancing operations of the Public Treasury, lowering costs and lengthening the average life of the debt.
2021 is expected to end with a portfolio average life of State Debt above 8 years, compared to 7.75 years in 2020. By 2022 the average life of the portfolio is expected to stabilize at that level or increase slightly, within a range of 8 to 8 , 2 years, which provides some protection against a possible rise in interest rates.
With respect to average cost of Treasury issues, in 2020 it stood at 0.18% and at the end of August of this year it was at -0.03% percent, that is, investors are paying for having Spanish debt. “To the extent that the profitability of the issues carried out by the Treasury during the year is lower than that of the old references that are expiring, it is expected that during 2021 and 2022 the average cost of outstanding State Debt will continue to fall , which closed 2020 at 1.86% and stands at 1.66% at the end of August 2021 “, states the document published today.
On the other hand, the Public Treasury plans to reduce its gross debt issues for 2022, up to 242,846 million euros, to cover the financing needs of public administrations and amortizations.
According to the General State Budget project, most of it will be placed in bonds and obligations, 90% of the total, followed by far by Treasury bills, 6.2% of the total, and other debt instruments, the 3.8%.
At the end of this year, the forecast is that bills will represent 6.6% and bonds and debentures, 93.4%.
The net indebtedness in 2022 amounting to 80,000 million, which will be provided only by bonds and obligations, as well as other debts in euros and foreign currency, since the Executive does not foresee that the bills issued next year provide net financing.
Next year Spain will not complement its debt issues with loans from the European Union (EU) of the SURE program, aimed at helping unemployment caused by the pandemic, as it has received all available funds from this European program in 2020 and 2021.
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