The sees the economic scenario forecast by the government on the evolution of the pandemic and its impact on activity and revenue as optimistic.
COVID-19 has obliged the government to increase spending significantly, with forecasts that the structural deficit will reach 5.4% of GDP in 2020. Assuming that part of the exceptional expenditure will remain in 2021, it is expected that the structural deficit will increase 0.7pp to 6.1% of GDP.
To compensate for the increase in expenditure, the government expects to raise €6.1 billion through new tax measures. The AIReF (the Independent Authority for Fiscal Responsibility) calculates that this is an overestimate of around €2 billion.
As a result, it is expected that the public debt will reach 120% of GDP in the long term, according to the AIReF.