The Government has approved the Generalitat's budget project for 2022, which foresees an exceptional increase in public spending, reaching a global value of 38,139 million euros, 5,618 million euros more (17.3%) than in the last accounts approved in 2020. The Minister of Economy and Finance, Jaume Giró, presented the main features of the budget to the country's main economic and social agents on November 9, at an event held in the Parliament's auditorium, and stressed that they will be "the lever for the country's social and economic reactivation".
Minister Giró assured that these budgets "are what Catalonia needs", and highlighted their "intense" investment vocation and their "undisputable" social character, which will make these accounts "a turning point towards economic progress, towards the strengthening of our welfare state, towards sustainability and towards social justice and equity". Of the total expenditure, resources allocated to social policies increase from 73.7% in 2020 to 74.6% planned for next year. That is, three out of every four euros will go to promoting education and healthcare, and to improving social rights and public transport, among others.
Departmental spending reaches 32,032 million
In absolute terms, the departments that increase their allocation the most are Salut (11,171 million euros, 1,456 million euros more), Educació (6,681 million euros, 1,009 million euros more), Drets Socials (3,969 million euros, another 905 million euros) and Vicepresidència, Polítiques Digitals i Territori (2,270 million euros, 511 million euros more). Overall, departmental spending in 2022 grows by 18.6% (5,022 million euros) compared to the 2020 budgets, reaching 32,032 million euros.
The increase in spending achieved in the 2022 accounts has been possible thanks to the contribution of the Next Generation Funds, which amount to 2,142 million euros and include, on the one hand, 1,527.6 million euros from the Recovery and Resilience Mechanism; and, on the other, 614.4 million euros from the REACT Funds. The departments of Salut, Drets Socials and Educació are the most benefited by the Next Generation Fund, with contributions of 319 million euros, 633 million euros and 405 million euros, respectively.
One of the most outstanding features of the accounts is their strongly investment-oriented nature. Thus, the investment of the public sector as a whole rises to 3,951 million euros and almost doubles the investment budgeted in 2020 (2,012 million euros). The policies that concentrate the greatest investment effort are Health (585 million euros), Housing and urban actions (529 million euros), Education (291 million euros), Roads (265 million euros), Information and Knowledge Society (227 million euros) and Railway infrastructures (223 million euros).
Extraordinary Covid-19 allocations of 500 million euros and 205 million euros for personnel
Apart from the Next Generation Funds, the Govern has also foreseen an extraordinary allocation of 500 million euros to continue facing the health expenses derived from the pandemic in the absence of a new state Covid-19 fund for 2022. In addition, an additional 205 million euros are allocated to maintain the extraordinary personnel programs hired due to the pandemic, as well as for the support staff for the management of the Next Generation Funds.
Regarding personnel, the budgets contemplate an increase of 28,882 positions compared to the 2020 accounts, the bulk of which are concentrated in the Salut department (17,663 positions). Also noteworthy is the increase in teaching and PAS staff (5,498 positions) and the reinforcement in the field of security (mossos, firefighters and rural agents), with 1,122 new allocations.
Unprecedented increases in housing, employment and culture
Among the most relevant actions in the budget, the unprecedented boost in housing policies stands out, with an increase of 387 million euros in contributions for aid and subsidies aimed at rehabilitation. The accounts also contemplate an allocation of 141 million euros to expand the current public housing stock by more than 3,300 homes through construction and pre-emption and retraction procedures. In addition, 100 million are allocated to aid for rent payment.
Along with housing, spending on employment policies, which grows by 248 million euros, and the culture budget, which amounts to 385 million euros, also register record increases.
In educational matters, free early childhood education for 2 to 3 year olds (P2) is established, with a cost of 90 million euros for the 22-23 academic year, and 22.8 million euros are allocated to the development of a shock plan for Vocational Training. Regarding higher education, 980.1 million euros are foreseen for the financing of public universities and R&D&i policies are increased by 212.8 million euros. In addition, an investment of 55 million euros for industry support programs is included.
Regarding welfare, 400 million euros are allocated to the guaranteed citizenship income, and 4 million euros are reserved to finance a pilot plan to implement the universal basic income, which would be launched in December 2022.
Other notable actions in the public accounts project include an increase of 119 million euros in the allocation for public transport; 59 million euros for advancing work on metro lines L9 and L10 in Barcelona; 92 million euros for equality and feminist policies; 42 million euros increase in investment for the deployment of fiber optics and 149.2 million euros to endow the climate fund and the natural heritage fund (with resources from the CO2 emissions tax).
1,487 million euros from authorized deficit
Apart from the Next Generation Funds, in the income section, resources from the authorized deficit also stand out, amounting to 1,487 million euros (0.6% of GDP, the reference rate for obtaining financing in 2022). On the contrary, the contribution from the financing model is reduced by 978 million euros, since in 2022 no positive settlement from the 2020 fiscal year is received. As for other revenues, the accounts foresee an increase of 588 million euros in the collection of own and ceded taxes and also the payment, by the State, of some arrears and historical debts, such as a part of the debt from the third additional provision of the Estatut and the deployment of the Mossos d'Esquadra police force (536 million euros in total), as well as 500 million euros from the pending return of one month of VAT.
It should be noted that, despite the increase in public deficit, the weight of Catalan debt on GDP is reduced by 2.2 points compared to 2021, as the good pace of economic growth makes the Generalitat's indebtedness more sustainable.
The Catalan economy grows strongly
The outbreak of the pandemic in 2020 put an end to 6 years of economic growth, in which Catalan GDP increased by an average of 2.8%. During 2021, the Catalan economy grew strongly, driven by the increase in household consumption (27.2% in the second quarter) and gross capital formation (19.1%). Goods exports also showed a very positive evolution, with an accumulated growth of 25.7% between January and August, exceeding 2019 levels in current values.
Regarding 2022, investment and external demand are expected to play a greater role, and Catalan GDP could reach the 2019 level. At the same time, the sustained recovery of the labor market would allow the unemployment rate to be reduced to 11.2% by the end of the year, below the state average (14.4%).