Finance minister, María Jesús Montero, earlier last month . / EP

Spain finished 2021 with a 6.9% deficit, some 18bn better than expected

The data confirms the impact of the pandemic on public finances in the country and the news wasn't as bad as initially thought


The Covid-19 pandemic had a big impact on public finances in Spain. After ending 2019 with a deficit of 2.8% of GDP, 2020 put it right back up to 11%, the highest in the EU, and 2021 closed at 6.9% (including the effects of funding grants). The data, published on Thursday, was mildly good news as the government had expected 1.5 points more and a deficit of 8.4% for 2021.

"This improvement in the fiscal balance of more than 31bn euros is not the result of a policy of cuts or austerity, but is down to an improvement in economic activity due to the income protection measures implemented by the government in the worst part of the pandemic," said Minister for Finance, María Jesús Montero.

In total, public authorities in Spain had a deficit of 82bn euros in 2021, 28% less than the 115.2bn euros of the year before. The figure was better than the Bank of Spain had estimated - it had thought it would have been 7.5% of GDP.

Despite the good news, the figures are still very high and it had been hoped they would improve after the pandemic. However the war in Ukraine has now made the situation more difficult.