Government spending in Spain from a european perspective

This document presents a detailed analysis of the structure of general government spending in Spain and its recent evolution in comparison to the rest of the European countries. The weight of the Spanish public spending is similar to that of neighboring countries, although it is in the lower range of a reference group of European countries (EU-15), with levels below the average. Thus, in 2019 the level of public spending stood at 42% of GDP compared to 46% in the EU-15, with a corresponding lower weight of public revenue (39.2% compared to 46% in the EU-15). In terms of the composition by expenditure items, Spain has a relatively high weight compared to other European countries in items such as social benefits (pensions and unemployment) and debt interest payments, but a relatively lower weight in items such as education and public investment. According to the available evidence, a composition of public spending with a lower weight in investment and education is usually associated, in the medium term, with lower rates of potential growth of the economy, and a lower capacity of public redistributive policies to reduce inequality (due to the lesser role of pre-market redistributive policies, which affect the level of skills of economic agents).