This Is the Exorbitant Amount the Government Spends on Social Aid

Four Out of Ten Euros of 2023 Public Spending Were Allocated to Pensions, Unemployment Benefits and Social Aid, According to the Latest Report from the Ministry of Finance. These Items Totaled 277.104 Billion Euros, Out of a Total Budget of 681 Billion.

The Report on the Classification of the Functions of Public Administrations (Cofog) Shows That Spending on Pensions and Other Social Benefits Grew by 27.9% Since 2019.

In Terms of Gross Domestic Product (GDP), Public Spending Represented 45.5%, Almost Half of the Country's Annual Economic Output. Compared to 2019, Total Government Spending Increased by 29.3%.

After Social Aid, the Largest Budget Items Were Allocated to Health and General Public Services.

For Medicines, Outpatient Clinics and Hospitals, 98.6 Billion Were Allocated, an Amount Higher Than That Allocated for General Public Services, Which Reached 84.784 Billion.

Social Spending, Which Includes Housing, Health, Education and Social Protection, Reached 66% of Total Public Spending. In Terms of GDP, It Accounted for 29.79%, Two Points More Than the Previous Year.

This Means That Two Out of Every Three Euros Spent by the State Were Allocated to This Type of Policies.

The Pandemic Boosted Public Spending

The Year 2020 Marked a Milestone in Spending, the Measures Adopted Due to the COVID-19 Health Crisis Made It Exceed 50% of GDP.

In 2023, the Proportion Fell by Five Points, but the Growth of Social Aid, Pensions and Healthcare Continues to Drive Spending.

In 2020, Temporary Employment Regulation Files, Medicine Purchase Programs and Direct Aid Raised Spending to 580 Billion.

Since Then, the Increase Has Been Continuous, Reaching 681 Billion in 2023. This Increase Seems Unstoppable Due to the Growing Pressure on the Pension System and the Expansion of Assistance Programs.

A Future with More Spending on Pensions

The Independent Authority for Fiscal Responsibility (AIReF) Predicts That Public Spending Will Continue to Increase in the Coming Decades.

By 2035, It Is Estimated to Reach 48% of GDP, and by 2050 It Could Exceed 52%. This Growth Will Depend on the Evolution of the Economy and Reforms in Retirement Age and Pension Calculation.

Projections Indicate That Spending on Pensions Will Reach a Maximum of 53% of GDP in 2058, Stabilizing Below 53% in 2070.

The Main Cause of This Increase Is Population Aging, Which Will Also Impact Other Sectors Such as Healthcare, Education and Care Services.

Debt and Interest Also Pressure the Budget

In Addition to Population Aging, the Accumulation of Debt and Rising Interest Rates Will Increase the Burden of Public Spending.

AIReF Predicts That Interest Payments on State Debt Will Represent 6.9% of GDP in 2070.

While Countries Like France and Belgium Allocate More Resources to Their Public Sector, Others Like the Netherlands or Ireland Maintain Smaller Structures.

Spain Has a Less Efficient Public Sector Than Other European Countries with Similar Systems, According to the Funcas Report.

The Lack of Public Investment Could Limit Long-Term Growth, While the High Burden on Companies in Contributions Reduces Their Competitiveness.

Experts Warn That Improving Spending Efficiency Is Key to Ensuring the Sustainability of the Welfare State.

With High Levels of Debt and Deficit, Spain Is More Vulnerable to Future Economic Crises. The Need to Address Population Aging and the Ecological Transition Adds Pressure to Public Accounts.

The Debate on the Public Spending Model and Its Sustainability Remains Open, with Forecasts Pointing to a Growing Burden on the State Budget in the Coming Decades.