Spain’s public sector budget surplus at 1.8 percent of GDP
New data from Spain shows that its economy continues to be among the most prosperous in Europe. It ran a public sector surplus amounting to 1.8 percent of the gross domestic product last year, the best it has managed in 30 years. Two-thirds of the surplus came from social security funds that were sent higher by contributions from immigrants and those new to the job market. Spain created half of the new jobs last year in the European Union, at nearly 700,000 new positions, and unemployment in the country is at an all-time low of 8 percent.
The surplus amounted to nearly €18 billion, and was used to pay off public debt and to build a reserve fund to pay pensions in the future, according to finance minister Pedro Solbes. Mr. Solbes said his goal is to bring public debt to below 30 percent of the GDP this year. It was at 39.8 percent of the GDP in 2006.
Only four Eurozone countries had a public sector surplus in 2006. In addition to Spain these were Finland, with the largest surplus and the only one higher than that of Spain, Ireland, and the Netherlands.
Economic growth in Spain last year exceeded the Eurozone average of 2.7 percent by rising to a six-year high of 3.9 percent. Inflation was at an annualized rate of 2.5 percent in February, with the expectation that it will rise to around 3 percent by the end of the year.
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