1
Budget 2011
Austerity, social welfare, credibility, joint responsibility

2
Contents:
Budget Features
The Generalitat’s budget
Public sector budget
Macroeconomic framework

3
Budget Features

Budget Features

4
Budget 2011 guidelines
Austerity: guaranteeing the Generalitat’s public finances sustainability

Social welfare as a prior...
Starting point
Revenues: The Generalitat’s non-financial revenues fell by €3.4bn between 2009
and 2010, bringing them down...
Government deficit and total debt
(As % of GDP in ESA terms)
% deficit / GDP

% debt / GDP

12,00

18,0
16.2

10,00

16,0
...
Austerity
Strong commitment to achieve the European Union’s Stability and Growth
Pact goals

Keeping the 2010 debt increas...
Commitment to cut general fund non-financial expenditures
(in ESA terms)1
M€

Amount

Actual 2010 expenditures (general fu...
Non-linear distribution of general fund non-financial expenditures by departments1
M€
Budget 2010

Budget 2011

2011 / 201...
Evolution of budgeted and actual interest expenditures1
M€
1.600

1,477.9

1.400
1.200

1,118.7

1.000

919.2
808.5

800

...
Expenditure cuts for 2011 (over 2010 initial estimates) have an effect on current,
capital and financial expenditures
M€

...
Social welfare as a priority (general fund non-financial expenditures in ESA terms)
Figures in M€

Budget 2010

Budget 201...
Supporting economic recovery and boosting productive economy

More than 2,200M€ of new ICF credit lines for SMEs. Official...
Credibility
Government’s strong commitment to address the Generalitat’s finances

The deficit reduction goal is tough, but...
Credibility in forecasting revenues
M€
Aggregation of initial estimates and actual amounts of the main taxes fully managed...
Generalitat’s revenues by chapter
M€

Budget 2010
Chapter

Budget 2011

2011 / 2010

Amount

%

Amount

%

%
change

1. Di...
Generalitat’s non-financial revenues
M€
2010

2011

M€

%

Inheritance and donations tax1
Tax on capital transfers and doc...
Generalitat’s expenditures by chapter
(includes general fund expenditures and expenditures financed by earmarked funds)
M€...
Main changes in the Generalitat de Catalunya’s budget
Figures in M€

Budget
2010

Budget
2011

Change 2011 / 2010
M€

Tota...
Detail of the evolution of the main expenditure policies and programs
Figures in M€

Budget 2010

Budget 2011

2011 / 2010...
Generalitat’s non-financial revenues and expenditures since 2004
Figures in M€

35.000

30.000

25.000

20.000

15.000

10...
Deficit (in ESA terms) forecast in the 2011 Budget
M€

2011
Generalitat non-financial revenues

22,304.7

Generalitat non-...
Deficit (in ESA terms) forecast in the 2011 Budget
As % of GDP

The effort made by the Generalitat to reduce the deficit i...
Generalitat de Catalunya’s fiscal program
Deficit (in ESA terms) over GDP
0,00
-0,50

-0.22
-0,62

-1,00
-1.10

-1.00

-1....
Catalunya’s public debt since 2006
Figures in M€
Debt (M€)
40.000

36.7

35.000

35,0

31,886

30.000

30,0

26.8
23,326

...
Other key elements of the deficit
Prudent revenue forecasts
Revenue estimates are coherent with the ongoing weak economic ...
Possible 2011 fiscal improvements in a scenario of joint
responsibility
M€

Amount

Deficit forecast in the 2011 Budget in...
Generalitat de Catalunya’s fiscal programme in a scenario of joint
responsibility with the Central Government
Deficit (in ...
Some specific issues about the Generalitat’s
public sector consolidated budget

Budget Features

30
Generalitat public sector entities included in the budget
(current situation)
Number of
entities1
Generalitat2

1

Catalan...
Generalitat public sector budgets1
M€

Budget 2010

Budget 2011

2011 / 2010

Amount

%

Amount

%

% change

Generalitat
...
Total investment: budgeted estimates and amounts financed using deferred
payment methods
M€

8.000
7.000

6,581.2
6,177.1
...
Future payments linked to investments made using deferred payment methods
Figures in M€

2011

2012

2013

2014

Financing...
Job positions included in the public sector consolidated budget
Number of job positions

2010

2011

2011/2010
number

hom...
Budget of the Generalitat de Catalunya

Budget of the Generalitat de Catalunya

36
Generalitat’s revenues by chapter
M€

Budget 2010
Chapter

Budget 2011

2011 / 2010

Amount

%

Amount

%

%
change

1. Di...
Generalitat funding system revenues
M€

Concept
Inheritance and donations tax(*)
Wealth tax
Tax on transfers and documente...
Generalitat’s expenditures by section
(includes general fund expenditures and expenditures financed by earmarked funds)
M€...
Generalitat’s expenditures by chapter
M€

Chapter

Budget 2010

Budget 2011

2011 / 2010

Amount

%

Amount

%

% change

...
Public sector consolidated budget

Public sector consolidated budget

41
Generalitat public sector budgets1
M€

Budget 2010

Budget 2011

2011 / 2010

Amount

%

Amount

%

% change

Generalitat
...
Generalitat’s public sector revenues by chapter
M€

Budget 2010
Chapter

Amount

Budget 2011
%

Amount

2011 / 2010
%

%
c...
Generalitat’s public sector expenditures by chapter
M€

Chapter

Budget 2010

Budget 2011

2011 / 2010

Amount

%

Amount
...
Macroeconomic framework

Macroeconomic framework

45
Macroeconomic forecast- Catalonia
% annual change –unless otherwise indicated
2009

2010

-4,2

0,1

0.9

207,237
-3.7

20...
Real GDP
% annual change

5,0
4,0
3,0

3.8

3.7

3.4

3.3

3.3

3.2

2.6

2,0
1,0

0.9

0,0
0.1

0.1

-1,0
-2,0
-3,0
-4,0
...
Internal and external demand
% contribution to growth

6,0

5.4
4.7

4,0

4.4

4.3

3.7

3.5

3.1

2,0

1.1

1.0

0.9
0.3
...
Housing

% interannual change, 12-month average
40

20

0

-20

-40

-60

-80

Started
Iniciats

Completed
Acabats

Source...
Imports and exports
% interannual change, 12-month average
25,0
20,0
15,0
10,0
5,0
0,0
-5,0
-10,0
-15,0
-20,0
-25,0

Expor...
Prices in Catalunya, Spain and the Eurozone
% interannual change

6,0
5,5
5,0
4,5
4,0
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
-0,5...
Unemployment rate (EPA)
% active population

25,0
22,5
20,0

18.8
17.8

17.1

17,5

18.0

2010

2011
(pr)

16.2
14.4

15,0...
www.gencat.cat/economia/pressupostos

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Catalan Government Budget 2011

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Catalan Government Budget 2011

Source: Generalitat de Catalunya

Date: 2011.

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Catalan Government Budget 2011

  1. 1. 1
  2. 2. Budget 2011 Austerity, social welfare, credibility, joint responsibility 2
  3. 3. Contents: Budget Features The Generalitat’s budget Public sector budget Macroeconomic framework 3
  4. 4. Budget Features Budget Features 4
  5. 5. Budget 2011 guidelines Austerity: guaranteeing the Generalitat’s public finances sustainability Social welfare as a priority: maintaining the welfare state main services Credibility: setting a severe, but attainable spending reduction goal Joint responsibility: the final deficit will depend on the Central Government’s cooperation and overall institutional loyalty Budget Features 5
  6. 6. Starting point Revenues: The Generalitat’s non-financial revenues fell by €3.4bn between 2009 and 2010, bringing them down to 2006 levels. Expenditures: Non-financial expenditures rose by 60% between 2004 and 2010. Deficit increase: The Generalitat’s budget deficit started increasing in 2007, surpassing €5bn in 2008. In 2010, the deficit reached €7.6bn, or 3.86% of Catalunya’s Gross Domestic Product. Unsustainable increase of debt: Total debt reached 16.2% of GDP at the end of 2010, more than twice the 7.5% reached in 2007. Budget Features 6
  7. 7. Government deficit and total debt (As % of GDP in ESA terms) % deficit / GDP % debt / GDP 12,00 18,0 16.2 10,00 16,0 8,00 14,0 11.9 6,00 12,0 9.3 4,00 2,00 7.4 7.8 8.1 7.6 10,0 7.5 8,0 0,00 -2,00 6,0 -0.73 -0.39 -0.45 -0.22 -0.62 4,0 -2.60 -4,00 -2.41 2,0 .-3,86 -6,00 0,0 2003 2004 2005 2006 Budget deficit Dèficit 2007 2008 2009 2010 (liq.prov.) Deute Debt Source: Bank of Spain, Government of Spain –department of State Administration- and Generalitat de Catalunya –Department for the Economy and Knowledge. Budget Features 7
  8. 8. Austerity Strong commitment to achieve the European Union’s Stability and Growth Pact goals Keeping the 2010 debt increase rate is unsustainable The welfare state can only be guaranteed by healthy government finances The Generalitat’s financial health assures and reinforces self-government Budget Features 8
  9. 9. Commitment to cut general fund non-financial expenditures (in ESA terms)1 M€ Amount Actual 2010 expenditures (general fund non-financial expenditures) 26,792.5 Commitment to reduce 10% of 2010 actual expenditures -2,680.0 General fund non-financial expenditures ceiling (in ESA terms) for 2011 24,112.5 . 1Non-financial expenditures in ESA terms (European System of National and Regional Accounts ESA95) includes the Generalitat’s expenditure chapters 1 to 7 and capital contributions (chapter 8), to finance the entities’ deficits and ESA entities deficit not financed by capital contributions. General fund expenditures do not include expenditures financed by earmarked revenues. Budget Features 9
  10. 10. Non-linear distribution of general fund non-financial expenditures by departments1 M€ Budget 2010 Budget 2011 2011 / 2010 amount amount M€ % change Presidency 677.6 536.2 -141.4 -20.9 Governance and Institutional Relations 406.5 325.4 -81.1 -19.9 Economy and Knowledge 1,476.6 1,213.8 -262.8 -17.8 Education 5,222.7 4,834.2 -388.5 -7.4 Health 9,599.7 8,978.9 -620.8 -6.5 Home Affairs 1,222.6 1,144.6 -78.1 -6.4 Territory and Sustainability 1,793.3 1,362.8 -430.5 -24.0 Culture 334.4 282.3 -52.1 -15.6 Agriculture, Livestock, Fisheries, Food and Natural Environment 479.1 367.2 -111.9 -23.4 1,941.0 1,746.5 -194.5 -10.0 761.5 586.3 -175.2 -23.0 1,001.2 911.7 -89.6 -8.9 24,916.2 22,289.9 -2,626.3 -10.5 1,120.2 1,482.6 362.5 32.4 513.4 340.0 -173.4 -33.8 Total 26,549.8 24,112.5 -2,437.3 -9.2 Total 2010 Actual and Budget 20112 26,792.5 24,112.5 -2,680.0 -10.0 Social Welfare and Family Enterprise and Labour Justice Subtotal departments Debt (interests) Others (higher bodies and other non-departmental funds) 1See previous page footnote. 2010 expenditures exceed in some cases the initial budgeted amounts. This has been remarkable in the Department of Health. 2Actual Budget Features 10
  11. 11. Evolution of budgeted and actual interest expenditures1 M€ 1.600 1,477.9 1.400 1.200 1,118.7 1.000 919.2 808.5 800 678.7 561.1 600 440.7 480.4 491.2 796.6 696.9 570.3 504.7 400 200 0 2005 2006 2007 Budget Debt interests growth in 2011 (Generalitat): 1Generalitat 2008 2009 2010 2011 Actual Over 2010 budget 359.2 Over 2010 actual 558.7 administration. The overall budgeted public sector interest expenditures for 2011 are 1,869.6M€ Source: Generalitat de Catalunya Budget. Budget Features 11
  12. 12. Expenditure cuts for 2011 (over 2010 initial estimates) have an effect on current, capital and financial expenditures M€ Generalitat’s budgeted expenditure cuts, by type Amount % Employee compensation -320.0 -5.8 Current expenditures on goods and services -234.5 -15.0 Current transfers -843.3 -4.6 Real investments -474.1 -42.2 Capitals transfers -371.6 -28.9 Capital contributions and loans -591.7 -39.3 Contingency fund -111.0 -74.0 -2,946.2 -10.0 Total expenditure reduction 1 Comparison between 2010 and 2011 initial estimates of the Generalitat’s expenditures chapters 1 to 8. Chapter 3 expenditures (interests), which increase by 359.2 M€, are not included. Budget Features 12
  13. 13. Social welfare as a priority (general fund non-financial expenditures in ESA terms) Figures in M€ Budget 2010 Budget 2011 Departments Amount Amount Healthcare 9,599.7 8,978.9 Education 5,222.7 4,834.2 Social welfare and family 1,941.0 1,746.5 Total welfare departments 16,763.4 15,559.6 Total departments 24,916.2 22,289.9 67% 70% % welfare expenditures to total departments general fund non-financial expenditures in ESA terms Budget Features 13
  14. 14. Supporting economic recovery and boosting productive economy More than 2,200M€ of new ICF credit lines for SMEs. Official credit actions increase by 29% Specific guarantee line of 350M€ assigned to business promotion and employment activities New model of vocational or technical education oriented to satisfy the needs of people and companies. Reform the employment agency (SOC) to encourage employability among the working people of Catalonia Implement a plan called “Single-Window Business” which aims to simplify the procedures with Public Administration Budget Features 14
  15. 15. Credibility Government’s strong commitment to address the Generalitat’s finances The deficit reduction goal is tough, but attainable Deficit reduction rigor slows down previous rates of debt increase Responsibility and achieving commitments enhances credibility and confidence from international markets and institutions Prudence in revenue forecasting in order to avoid deviations Fiscal year 2012 will deepen expenditure rationalisation and saving Budget Features 15
  16. 16. Credibility in forecasting revenues M€ Aggregation of initial estimates and actual amounts of the main taxes fully managed by Generalitat1, excluding inheritance and donations tax –impacted by regulatory changes in 2010 and 2011. 6.000 5,525 5.500 4,945 4,880 5.000 4.500 4,234 4,689 4.000 4,239 3,516 3,974 3.500 3,182 2,826 3.000 3,319 2,464 2.500 2,080 2,588 2,479 1,999 2.000 2,157 2,108 2009 2,022 2010 1.500 1.000 2002 2003 2004 2005 Initial estimates 2006 2007 2008 2011 Actual Source: Department for the Economy and Knowledge 1Tax on large commercial establishments, tax on capital transfers and documented legal acts, vehicle registration tax , tax on retail sales of certain hydrocarbons and gambling taxes. Budget Features 16
  17. 17. Generalitat’s revenues by chapter M€ Budget 2010 Chapter Budget 2011 2011 / 2010 Amount % Amount % % change 1. Direct taxes 6,387.5 19.6 8,358.5 25.6 30.9 2. Indirect taxes 6,322.9 19.4 8,567.4 26.3 35.5 489.5 1.5 465.4 1.4 -4.9 9,532.7 29.3 3,890.1 11.9 -59.2 53.7 0.2 9.9 0.0 -81.7 22,786.3 70.1 21,291.2 65.3 -6.6 0.0 0.0 200.0 0.6 -- 7. Capital transfers 313.6 1.0 813.5 2.5 159.4 Capital revenues 313.6 1.0 1,013.5 3.1 223.1 23,099.9 71.0 22,304.7 68.4 -3.4 0.0 0.0 210.1 0.6 -- 23,099.9 71.0 22,514.8 69.0 -2.5 9,418.8 29.0 10,115.3 31.0 7.4 32,518.7 100.0 32,630.0 100.0 0.3 3. Fees, sales and other revenue 4. Current transfers 5. Property revenues Current revenues 6. Real investments disposals Total non-financial revenues 8. Financial assets1 Total revenues chapters 1 to 8 9. Financial liabilities (debt)2 Total revenues 1Forecasted 2Includes revenues for 2011 include the sale of financial assets. debt refinancing. Forecast of 5,622.4M€ of net debt variation for 2011. In 2010, the initial estimate was 7,624.3M€. Budget Features 17
  18. 18. Generalitat’s non-financial revenues M€ 2010 2011 M€ % Inheritance and donations tax1 Tax on capital transfers and documented legal acts Other totally devolved taxes Subtotal totally devolved taxes Personal income tax (regional share) VAT (share of Spanish central government tax) Other taxes Pending settlements of partially devolved Spanish central government taxes Subtotal partially devolved taxes Subtotal devolved taxes 899.7 1,466.0 1,262.7 3,628.4 5,472.5 2,438.8 1,464.7 -9,375.9 13,004.3 288.6 1,286.6 978.0 2,553.2 8,055.9 4,619.0 2,072.5 -80.3 14,667.1 17,220.2 -611.1 -179.4 -284.7 -1,075.2 2,583.4 2,180.2 607.8 -5,291.1 4,215.9 -67.9 -12.2 -22.5 -29.6 47.2 89.4 41.5 -56.4 32.4 Equalization transfer Equalization transfer pending settlements Advance of new funding system resources Global Sufficiency Fund (advance) Fundamental Services Guarantee Fund (advance) Rest of resources of the funding system2 Subtotal funding system transfers Total funding system revenues Rest of general fund revenues3 Local Governments share of Central Government’s Revenues (earmarked) Rest of earmarked revenues4 Total Generalitat non-financial revenues Total general fund non-financial revenues Total earmarked non-financial revenues 2,508.3 -2,372.0 --1,436.4 6,316.7 19,321.0 292.3 2,386.3 1,100.3 23,099.9 19,554.7 3,545.2 --57.8 -1,840.1 -1,460.0 102.0 424.2 17,644.4 1,107.6 2,670.2 882.4 22,304.7 18,684.1 3,620.7 ------1,334.4 -5,892.5 -1,676.6 815.3 284.0 -217.9 -795.2 -870.7 75.5 ------92.9 -93.3 -8.7 278.9 11.9 -19.8 -3.4 -4.5 2.1 Concept 1The 2In Var. 2011 / 2010 estimates for 2011, without the 2011 regulation changes, would be 339.8M€. After the changes, 2011 revenues fall by 51.2M€. 2010, it included the wealth tax abolition compensation, the regional police funding and the health funding agreement funds, which have been integrated into the funding system. . 3 In 2011, it includes the resources of the 3rd additional provision of Catalonia’s Statute of Autonomy. 4Includes the resources provided by the Spanish Central Government and the European Union to be used for specific programmes and fee revenues earmarked to specific expenditures. Budget Features 18
  19. 19. Generalitat’s expenditures by chapter (includes general fund expenditures and expenditures financed by earmarked funds) M€ Chapter Budget 2010 Budget 2011 2011 / 2010 Amount % Amount % % change 1. Employee compensation 5,479.2 16.8 5,159.2 15.8 -5.8 2. Current expenditures on goods and services 1,564.6 4.8 1,330.1 4.1 -15.0 3. Interests and financial fees 1,118.7 3.4 1.477.9 4.5 32.1 4. Current transfers 18,494.4 56.9 17,651.1 54.1 -4.6 5. Contingency fund 150.0 0.5 39.0 0.1 -74.0 26,806.9 82.4 25,657.3 78.6 -4.3 6. Real investments 1,124.2 3.5 650.1 2.0 -42.2 7. Capital transfers 1,286.1 4.0 914.6 2.8 -28.9 Capital expenditures 2,410.4 7.4 1,564.7 4.8 -35.1 29,217.3 89.8 27,222.0 83.4 -6.8 1,506.9 4.6 915.2 2.8 -39.3 30,724.2 94.5 28,137.2 86.2 -8.4 1,794.5 5.5 4,492.9 13.8 150.4 32,518.7 100.0 32,630.0 100.0 0.3 Current expenditures Total non-financial expenditures 8. Financial assets1 Total expenditures chapters 1 to 8 9. Financial liabilities2 Total expenditures 1Capital 2Debt contributions and loans. repayment expenditures. Budget Features 19
  20. 20. Main changes in the Generalitat de Catalunya’s budget Figures in M€ Budget 2010 Budget 2011 Change 2011 / 2010 M€ Total budget % 32,518.7 32,630.0 111.3 0.3% Debt amortisation(*) 1,794.5 4,492.9 2,698.3 150.4% Debt interest expenditures(**) 1,118.7 1,477.9 359.2 32.1% 29,605.5 26,659.3 -2,946.2 -10.0% Expenditures related to: Other expenditures (*) Expenditures are linked to the debt redemption calendar. (**) Figures computed on a budget to budget comparison . However, when comparing 2011’s budget figures to the final data available for 2010, debt interest expenditures have risen by 558.7M€, or 60.8%, from 2010. Budget Features 20
  21. 21. Detail of the evolution of the main expenditure policies and programs Figures in M€ Budget 2010 Budget 2011 2011 / 2010 Expenditure policies and programs 2011 expenditure moves to levels of Amount Amount Var. % General education1 4,784.6 4,579.9 -4.3% 2008 Social protection 1,992.7 1,882.8 -5.5% 2009 Health 9,606.3 9,063.2 -5.7% 2008 Security and civil protection 1,199.3 1,117.8 -6.8% 2009 Justice 931.1 848.0 -8.9% 2008 Social media 376.6 323.2 -14.2% 2008 Employment promotion 728.6 618.7 -15.1% 2009 Housing and other urban projects 306.3 256.2 -16.4% 2007 Running institutions and general administration 1,938.5 1,565.0 -19.3% before 20062 Transportation 1,253.8 866.0 -30.9% before 20062 Rest of programs 6,486.3 5,533.6 -14.7% 2006 29,604.0 26,654.5 -10.0% 2007 2,914.7 5,975.5 105.0% increases 32,518.7 32,630.0 0.3% Subtotal programs, except debt expenditures Public debt repayment and financial expenditures3 Total Generalitat expenditures 12011 includes the effect of reclassifying the administration personnel of education centers in the general education 2Policy and program expenditure classification has been used since 2006. There is no available data before 2006. 3Includes debt and interests refinancing. program. Budget Features 21
  22. 22. Generalitat’s non-financial revenues and expenditures since 2004 Figures in M€ 35.000 30.000 25.000 20.000 15.000 10.000 2004 2005 2006 2007 Non-financial no financers Ingressos revenues 2008 2009 2010 2011 Non-financial no financeres Despeses expenditures Source: Department for the Economy and Knowledge . Budget features 22
  23. 23. Deficit (in ESA terms) forecast in the 2011 Budget M€ 2011 Generalitat non-financial revenues 22,304.7 Generalitat non-financial expenditures 27,222.0 Generalitat non-financial budget position -4,917.3 ESA adjustments* Non-financial budget position in ESA terms % deficit over GDP -491.1 -5,408.4 -2.66% Deficit falls by 2,200M€ compared with 2010 actual amounts (-29%) *ESA adjustments includes the non-financial position of entities classified as public administration (PA-ESA) (-414.5 M€), capital contributions assimilated to non-financial expenditures to entities not classified as PA-ESA(-94.7M€), the rest of adjustments (lower expenditure execution, accrual adjustments, revenue shortfall risks, etc., (-120 M€) and the fifth part of a negative pending settlement from 2008 (138,1M€). Budget Features 23
  24. 24. Deficit (in ESA terms) forecast in the 2011 Budget As % of GDP The effort made by the Generalitat to reduce the deficit is higher than the effort planned for the rest of the autonomous communities 2010 2011 Change Overall Autonomous Communities deficit goal 2.40 1.30 -1.10 Generalitat deficit 3.86 2.66 -1.20 Budget Features 24
  25. 25. Generalitat de Catalunya’s fiscal program Deficit (in ESA terms) over GDP 0,00 -0,50 -0.22 -0,62 -1,00 -1.10 -1.00 -1.30 -1,50 -2,00 -2,50 -2.41 -2.60 -2.66 -3,00 -3,50 -4,00 -3.86 -4,50 2006 Actual 1Fiscal 2007 Actual 2008 Actual 2009 Actual 2010 Actual (prov.) 2011 Budget 2012 2013 2014 CPFF1 2012-2014 goals and Financial Policy Board Source: Department for the Economy and Knowledge and INE. Budget Features 25
  26. 26. Catalunya’s public debt since 2006 Figures in M€ Debt (M€) 40.000 36.7 35.000 35,0 31,886 30.000 30,0 26.8 23,326 25.000 18,848 20.000 15.000 Annual % change in public debt 40,0 37,443 14,043 25,0 17.4 23.8 20,0 14,863 15,0 10,0 10.000 5.8 5.000 5,0 1.8 0,0 0 2006 2007 2008 Deute Public debt 2009 2010 2011 (pr) % Annual anual del deute variació % change in public debt Source: Bank of Spain (2006-2010) and Generalitat de Catalunya: Departament for the Economy and Knowledge. Budget Features 26
  27. 27. Other key elements of the deficit Prudent revenue forecasts Revenue estimates are coherent with the ongoing weak economic situation Revenues that depend on the Central Government’s joint responsibility (competitiveness fund, institutional loyalty and other additional funds) are not included ESA adjustments variability The final calculation depends on the ongoing review of the European System of Accounts’ (ESA) application range Budget Features 27
  28. 28. Possible 2011 fiscal improvements in a scenario of joint responsibility M€ Amount Deficit forecast in the 2011 Budget initial estimates(*) % GDP -5,408 -2.66% Competitiveness Fund collection 1,450 Additional resources by using an alternative calculation of the 3rd additional provision of Catalonia’s Statute of Autonomy and institutional loyalty 1,200 Higher investments disposal (if Central Government transfers assets) Deficit 200 -2,558 -1.26% (*) Deficit in ESA terms. Budget Features 28
  29. 29. Generalitat de Catalunya’s fiscal programme in a scenario of joint responsibility with the Central Government Deficit (in ESA terms) over GDP 0,00 -0,50 -0.22 -0.62 -1,00 -1.10 -1.26 -1,50 2012 2013 2014 -1.30 2011 Budget -1.00 -2,00 -2,50 -2.41 -2.60 -3,00 -3,50 -4,00 -3.86 -4,50 2006 Actual 2007 Actual 2008 Actual 2009 Actual 2010 Actual (prov.) CPFF 2012-2014 goals Source: IGAE and Department for the Economy and Knowledge. Budget Features 29
  30. 30. Some specific issues about the Generalitat’s public sector consolidated budget Budget Features 30
  31. 31. Generalitat public sector entities included in the budget (current situation) Number of entities1 Generalitat2 1 Catalan Healthcare Service, Catalan Institute of Health and Catalan Institute of Assistance and Social Services 3 Autonomous administrative entities Autonomous commercial and financial entities 25 5 Public law companies 46 Trading companies 52 Consortiums 62 Foundations 46 Total Generalitat public sector entities Other PA-ESA entities non-majority shareholding Total entities 1. 2. The Government plans simplify, rationalise and redefine the public sector institutional network 240 28 268 GC (Generalitat de Catalunya): Includes 12 departments, 5 non-departmental funds and 6 higher bodies. PS (Generalitat public sector): Includes the Generalitat and all fully owned entities, or those in which the government has a majority stake. PA-ESA (Public administration in ESA terms): Includes the Generalitat and all entities classified as public administration according to ESA regulations (including those in which the Generalitat does no have a majority stake). Existing entities at the beginning of the fiscal year. See definitions at the box on the right side of the slide. Budget Features 31
  32. 32. Generalitat public sector budgets1 M€ Budget 2010 Budget 2011 2011 / 2010 Amount % Amount % % change Generalitat 32,518.7 53.2 32,630.0 55.3 0.3 Catalan Healthcare Service, Catalan Institute of Health and Catalan Institute of Assistance and Social Services 14,087.8 23.1 13,436.7 22.8 -4.6 Autonomous administrative entities 926.0 1.5 785.3 1.3 -15.2 Autonomous commercial and financial entities 137.9 0.2 131.2 0.2 -4.8 Public law companies 6,667.2 10.9 5,466.8 9.3 -18.0 Trading companies 3,025.8 5.0 2,345.0 4.0 -22.5 Consortiums 3,098.8 5.1 3,506.6 5.9 13.2 Foundations 648.1 1.1 705.3 1.2 8.8 61,110.3 100.0 59,007.0 100.0 -3.4 Total Internal transfers -21,411.0 -19,653.0 -8.2 Total consolidated2 39,699.3 39,354.0 -0.9 1Includes 2 financial operations. Total consolidated amounts in the 2010 and 2011 Budgets are not fully comparable because of a change in the number of entities,. Budget Features 32
  33. 33. Total investment: budgeted estimates and amounts financed using deferred payment methods M€ 8.000 7.000 6,581.2 6,177.1 5,906.5 5,778.3 6.000 5,284.6 5,099.7 5.000 3,901.6 4.000 3,138.2 3.000 2,222.4 2.000 1,297.8 1,367.6 1998 1999 1,567.4 2,450.4 1,795.6 1.000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Budget Features 33
  34. 34. Future payments linked to investments made using deferred payment methods Figures in M€ 2011 2012 2013 2014 Financing of road works 109.9 306.7 111.6 58.9 Financing of transport and mobility 211.2 366.8 278.1 91.9 4.6 35.9 50.8 14.7 Underground Line 9 278.3 472.4 509.6 536.1 Other infrastructure and equipment concessions 133.5 180.1 213.5 251.1 Land rights related to equipment 79.6 93.5 115.3 131.9 Other projects 28.6 26.0 26.0 7.0 845.5 1,481.5 1,305.0 1,091.6 Financing of irrigation systems Total Budget Features 34
  35. 35. Job positions included in the public sector consolidated budget Number of job positions 2010 2011 2011/2010 number homogeneous1 % Executive personnel 247 211 -36 -14.6% Temporary consulting personnel 303 203 -100 -33.0% Other executive personnel (public sector entities) 171 135 -36 -21.1% Subtotal executive and consulting personnel 721 549 -172 -23.9% 168,332 168,113 -219 -0.1% 62,831 62,351 -480 -0.8% 231,884 231,013 -871 -0.4% Subtotal civil servants Subtotal private regulation personnel Total public sector 1Includes personnel transfers and extensions done during fiscal year 2010 and the effect of the incorporation of new entities in the 2011 Budget . Budget Features 35
  36. 36. Budget of the Generalitat de Catalunya Budget of the Generalitat de Catalunya 36
  37. 37. Generalitat’s revenues by chapter M€ Budget 2010 Chapter Budget 2011 2011 / 2010 Amount % Amount % % change 1. Direct taxes 6,387.5 19.6 8,358.5 25.6 30.9 2. Indirect taxes 6,322.9 19.4 8,567.4 26.3 35.5 489.5 1.5 465.4 1.4 -4.9 9,532.7 29.3 3,890.1 11.9 -59.2 53.7 0.2 9.9 0.0 -81.7 22,786.3 70.1 21,291.2 65.3 -6.6 0.0 0.0 200.0 0.6 -- 7. Capital transfers 313.6 1.0 813.5 2.5 159.4 Capital revenues 313.6 1.0 1,013.5 3.1 223.1 23,099.9 71.0 22,304.7 68.4 -3.4 0.0 0.0 210.1 0.6 -- 23,099.9 71.0 22,514.8 69.0 -2.5 9,418.8 29.0 10,115.3 31.0 7.4 32,518.7 100.0 32,630.0 100.0 0.3 3. Fees, sales and other revenue 4. Current transfers 5. Property revenues Current revenues 6. Real investments disposals Total non-financial revenues 8. Financial assets1 Total revenues chapters 1 to 8 9. Financial liabilities (debt)2 Total revenues 1Forecasted 2Includes revenues for 2011 include the sale of financial assets. debt refinancing. Forecast of 5,622.4M€ of net debt variation for 2011. In 2010, the initial estimate was 7,624.3M€. Budget of the Generalitat de Catalunya 37
  38. 38. Generalitat funding system revenues M€ Concept Inheritance and donations tax(*) Wealth tax Tax on transfers and documented legal acts Gambling taxes Energy tax Vehicle registration tax Tax on retail sales of certain hydrocarbons Totally devolved taxes Personal income tax (regional share) VAT (share of Spanish central government tax) Tax on tobacco products (share of Spanish central government tax) Tax on alcoholic drinks (share of Spanish central government tax) Hydrocarbon tax (share of Spanish central government tax) Pending settlements of partially devolved taxes (**) Partially devolved taxes Total devolved tax revenues Equalisation transfer Healthcare specific funds(***) Health financing transfers Pending settlements of equalisation transfer Advance of new funding system resources(****) Global Sufficiency Fund (advance) Fundamental Services Guarantee Fund (advance) Total transfer revenues Total funding system revenues 2010 Budget 899.7 0.0 1,466.0 309.2 280.1 321.5 351.9 3,628.4 5,472.5 2,438.8 680.1 81.1 703.5 0.0 9,375.9 13,004.3 2,508.3 103.5 103.1 0.0 3,601.8 --6,316.7 19,321.0 2010 Actual 658.8 13.1 1,398.2 285.9 280.1 137.0 272.9 3,046.1 5,472.5 2,438.8 680.1 81.1 703.5 0.0 9,375.9 12,422.0 2,495.6 84.4 103.1 0.0 3,515.7 --6,198.8 18,620.8 2011 Budget 288.6 0.0 1,286.6 308.3 279.3 110.0 280.4 2,553.2 8,055.9 4,619.0 953.7 122.3 996.6 -80.3 14,667.1 17,220.2 -102.0 --57.8 -1,840.1 -1,460.0 424.2 17,644.4 2011 / 2010 Budget % var. -67.9 --12.2 -0.3 -0.3 -65.8 -20.3 -29.6 47.2 89.4 40.2 50.7 41.7 -56.4 32.4 --1.4 ------93.3 -8.7 (*) The estimates for 2011, without the 2011 regulation changes, would be 339.8M.€ After the changes, 2011 revenues fall by 51.2M€. (**) Pending settlements of specific consumption taxes, Personal income tax and VAT. (***) Health cohesion fund, temporary incapacity control and accidents and foreign invoicing. (****) Includes Wealth tax elimination compensation and regional police financing. El pressupost de la Generalitat de Catalunya 38
  39. 39. Generalitat’s expenditures by section (includes general fund expenditures and expenditures financed by earmarked funds) M€ Budget 20101 Budget 2011 2011 / 2010 Section Amount % Amount % % change Higher bodies and other bodies 108.9 Presidency 694.6 2.6 544.7 2.3 -21.6 Governance and Institutional Relations 445.8 1.7 342.7 1.4 -23.1 Economy and Knowledge 1,593.4 6.0 1,279.9 5.4 -19.7 Education 5,317.6 19.9 4,894.3 20.7 -8.0 Health 9,709.4 36.4 9,127.9 38.6 -6.0 Home Affairs 1,301.6 4.9 1,203.0 5.1 -7.6 Territory and Sustainability 2,013.2 7.5 1,389.5 5.9 -31.0 Culture 366.4 1.4 302.4 1.3 -17.5 Agriculture, Livestock, Fisheries, Food and Natural Environment 576.1 2.2 429.7 1.8 -25.4 Social Welfare and Family 2,216.0 8.3 2,085.5 8.8 -5.9 Enterprise and Labour 1,456.8 5.5 1,126.9 4.8 -22.6 Justice 1,007.3 3.8 917.8 3.9 -8.9 26,698.3 100.0 23,644.3 100.0 -11.4 Total departments1 95.1 Debt (includes refinancing) Local Governments share of Central Government’s Revenues Rest of non-departmental sections 2,914.7 2,386.3 410.6 5,975.5 2,670.2 245.0 Total non-departmental funds 5,711.5 8,890.7 32,518.7 32,630.0 Total expenditures 1. Budget 2010 shown in a departmental structure homogeneous to Budget 2011. Budget of the Generalitat de Catalunya 39
  40. 40. Generalitat’s expenditures by chapter M€ Chapter Budget 2010 Budget 2011 2011 / 2010 Amount % Amount % % change 1. Employee compensation 5,479.2 16.8 5,159.2 15.8 -5.8 2. Current expenditures on goods and services 1,564.6 4.8 1,330.1 4.1 -15.0 3. Interests and financial fees 1,118.7 3.4 1.477.9 4.5 32.1 4. Current transfers 18,494.4 56.9 17,651.1 54.1 -4.6 5. Contingency fund 150.0 0.5 39.0 0.1 -74.0 26,806.9 82.4 25,657.3 78.6 -4.3 6. Real investments 1,124.2 3.5 650.1 2.0 -42.2 7. Capital transfers 1,286.1 4.0 914.6 2.8 -28.9 Capital expenditures 2,410.4 7.4 1,564.7 4.8 -35.1 29,217.3 89.8 27,222.0 83.4 -6.8 1,506.9 4.6 915.2 2.8 -39.3 30,724.2 94.5 28,137.2 86.2 -8.4 1,794.5 5.5 4,492.9 13.8 150.4 32,518.7 100.0 32,630.0 100.0 0.3 Current expenditures Total non-financial expenditures 8. Financial assets1 Total expenditures chapters 1 to 8 9. Financial liabilities2 Total expenditures 1Capital 2Debt contributions and loans. repayment expenditures. Budget of the Generalitat de Catalunya 40
  41. 41. Public sector consolidated budget Public sector consolidated budget 41
  42. 42. Generalitat public sector budgets1 M€ Budget 2010 Budget 2011 2011 / 2010 Amount % Amount % % change Generalitat 32,518.7 53.2 32,630,0 55.3 0.3 Catalan Healthcare Service, Catalan Institute of Health and Catalan Institute of Assistance and Social Services 14,087.8 23.1 13,436,7 22.8 -4.6 Autonomous administrative entities 926.0 1.5 785,3 1.3 -15.2 Autonomous commercial and financial entities 137.9 0.2 131,2 0.2 -4.8 Public law companies 6,667.2 10.9 5,466,8 9.3 -18.0 Trading companies 3,025.8 5.0 2,345,0 4.0 -22.5 Consortiums 3,098.8 5.1 3,506,6 5.9 13.2 Foundations 648.1 1.1 705,3 1.2 8.8 61,110.3 100.0 59,007,0 100.0 -3.4 Total Internal transfers -21,411.0 -19,653,0 -8.2 Total consolidated2 39,699.3 39,354,0 -0.9 1Includes 2 financial operations. Total consolidated amounts in the 2010 and 2011 Budgets are not fully comparable because of a change in the number of entities,. Public sector consolidated budget 42
  43. 43. Generalitat’s public sector revenues by chapter M€ Budget 2010 Chapter Amount Budget 2011 % Amount 2011 / 2010 % % change 1. Direct taxes 6,387.5 16.1 8,358.5 21.2 30.9 2. Indirect taxes 6,322.9 15.9 8,567.4 21.8 35.5 3. Fees, sales and other revenue 2,941.3 7.4 3,099.0 7.9 5.4 10,049.3 25.3 4,431.6 11.3 -55.9 211.1 0.5 301.6 0.8 42.9 25,912.1 65.3 24,758.1 62.9 -4.5 694.6 1.7 436.5 1.1 -37.2 7. Capital transfers 1,155.8 2.9 988.5 2.5 -14.5 Capital revenues 1,850.4 4.7 1,425.0 3.6 -23.0 27,762.5 69.9 26,183.1 66.5 -5.7 504.6 1.3 1.019.3 2.6 102.0 Total revenues chapters 1 to 8 28,267.1 71.2 27,202.4 69.1 -3.8 9. Financial liabilities (debt)2 11,432.1 28.8 12,151.6 30.9 6.3 Total revenues 39,699.3 100.0 39,354.0 100.0 -0.9 4. Current transfers 5. Property revenues Current revenues 6. Real investments disposal Total non-financial revenues 8. Financial assets1 1Forecasted 2Includes revenues for 2011 include the sale of financial assets. debt refinancing. Public sector consolidated budget 43
  44. 44. Generalitat’s public sector expenditures by chapter M€ Chapter Budget 2010 Budget 2011 2011 / 2010 Amount % Amount % % change. 10,144.0 25.6 9,649.7 24.5 -4.9 2. Current expenditures on goods and services 8,516.2 21.5 8,316.4 21.1 -2.3 3. Interests and financial fees 1,439.4 3.6 1,869.6 4.8 29.9 4. Current transfers 9,799.5 24.7 9,221.6 23.4 -5.9 5. Contingency fund 150.0 0.4 39.0 0.1 -74.0 30,049.2 75.7 29,096.3 73.9 -3.2 4,163.6 10.5 2,231.0 5.7 -46.4 965.2 2.4 740.6 1.9 -23.3 5,128.8 12.9 2,971.6 7.6 -42.1 35,178.0 88.6 32,067.9 81.5 -8.8 1,740.6 4.4 1,861.6 4.7 6.9 36,918.6 93.0 33,929.4 86.2 -8.1 2,780.6 7.0 5,424.6 13.8 95.1 39,699.3 100.0 39,354.0 100.0 -0.9 1. Employees compensation Current expenditures 6. Real investments 7. Capital transfers Capital expenditures Total non-financial expenditures 8. Financial assets1 Total expenditures chapters 1 to 8 9. Financial liabilities2 Total expenditures 1Capital 2Debt contributions and loans. repayment expenditures. Public sector consolidated budget 44
  45. 45. Macroeconomic framework Macroeconomic framework 45
  46. 46. Macroeconomic forecast- Catalonia % annual change –unless otherwise indicated 2009 2010 -4,2 0,1 0.9 207,237 -3.7 209,727 1.2 214,131 2.1 -5.2 -0.3 0.0 -4.2 6.1 -14.6 -17.9 -11.7 1.7 0.2 -5.6 -1.5 -10.7 1.1 -1.3 -2.0 2.1 -6.1 Foreign trade balance1 1.0 0.3 0.9 Foreign trade balance3 2.2 1.0 0.7 -12.3 -17.0 -1.2 12.6 8.4 -0.7 6.2 3.7 0.2 0.6 1.1 1.2 -259.3 -7.5% 16.2% -57.6 -1.8% 17.8% -6.3 -0.2% 18.0% GDP market prices (% real change) GDP (M€) GDP (% nominal change) Internal demand1 Household consumption Public sector consumption2 Investment3 Capital goods and others Construction Exports of goods and services Imports of goods and services Balance with the rest of Spain3 2011 Prices GDP Deflator Labour market Jobs created (thousands)4 Jobs created (% change)4 Estimated unemployment rate (EPA) (% unemployed/active population) 1. Contribution to growth. 2. Includes non-profit household consumption. 3. Includes stock variation 4. Full-time jobs . Source: Idescat and Department for the Economy and Knowledge. . Macroeconomic framework 46
  47. 47. Real GDP % annual change 5,0 4,0 3,0 3.8 3.7 3.4 3.3 3.3 3.2 2.6 2,0 1,0 0.9 0,0 0.1 0.1 -1,0 -2,0 -3,0 -4,0 -4.2 -5,0 2001 2002 2003 2004 Catalunya 2005 2006 Espanya Spain 2007 2008 2009 2010 (pr) 2011 (pr) Zona euro Eurozone (pr) estimate Sources: IDESCAT, INE, IMF, Economy Ministry and Department for the Economy and Knowledge. Macroeconomic framework 47
  48. 48. Internal and external demand % contribution to growth 6,0 5.4 4.7 4,0 4.4 4.3 3.7 3.5 3.1 2,0 1.1 1.0 0.9 0.3 0.0 0,0 -0.1 -0.5 -0.3 -0.3 -1.0 -2,0 -1.1 -1.5 -1.2 -1.0 -4,0 -5.2 -6,0 2001 2002 2003 2004 Demanda interna Internal demand 2005 2006 2007 External demand Demanda externa 2008 2009 2010 2011 (pr) PIB real GDP Real (pr) estimate Source: Idescat. Macroeconomic framework 48
  49. 49. Housing % interannual change, 12-month average 40 20 0 -20 -40 -60 -80 Started Iniciats Completed Acabats Source: Ministry of Development Macroeconomic framework 49
  50. 50. Imports and exports % interannual change, 12-month average 25,0 20,0 15,0 10,0 5,0 0,0 -5,0 -10,0 -15,0 -20,0 -25,0 Exportacions exports Importacions imports Source: Idescat , based on Spanish Tax Administration Agency data. Macroeconomic framework 50
  51. 51. Prices in Catalunya, Spain and the Eurozone % interannual change 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 -0,5 -1,0 -1,5 Catalunya Espanya Spain Zona euro (IPCH) Eurozone Source: INE and Eurostat. Macroeconomic framework 51
  52. 52. Unemployment rate (EPA) % active population 25,0 22,5 20,0 18.8 17.8 17.1 17,5 18.0 2010 2011 (pr) 16.2 14.4 15,0 12,5 10.7 10,0 10.1 8.9 10.1 9.7 9.0 8.6 7.0 7,5 6.6 6.5 2005 2006 2007 5,0 1996 1997 1998 1999 2000 2001 2002 Catalunya 2003 2004 Spain Espanya 2008 2009 Zona euro Eurozone (pr) estimate Source: Idescat, INE, Eurostat, Department for the Economy and Knowledge, IMF, Economy Ministry Macroeconomic framework 52
  53. 53. www.gencat.cat/economia/pressupostos 53

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