Page 71 - Economic report 2020

Real investment by the Government falls
GOVERNMENT NON-FINANCIAL
EXPENDITURE - Thousands of euros Chart 8.6 to the lowest level in the last 30 years.

Total settled capital expenditure was €56.2
million, 3% less than the previous year. So,
the investment effort both in absolute and
relative terms (11.9% of total non-financial
expenditure) is still far from the levels of the
previous expansionary phase. By chapters,
the reduction in capital expenditure can be
explained by the cut in real investment (-8.9%)
to €23.1 million, the lowest figure in nominal
terms since 1992. In contrast, capital transfers
Operating costs Capital transfers
increased moderately (+1.5%) to €33.1 million.
Current transfers Interest Real investment
In the case of current expenditure, the decline
Note: In 2016, transfers to the Comú governments were no longer
considered capital transfers (according to previous legislation, it was recorded in 2022 can be explained exclusively
considered that the bulk of the transfers had to be allocated to investment
by the Comú governments) and became current transfers (Comú by the chapter of current transfers (-12.1%),
governments may allocate these transfers to both current expenditure to €221.9 million, largely due to elimination of
and capital expenditure and to reducing debt). From the 2020 budget
onwards, it was decided to segregate the Comú transfers, between the aid provided in the pandemic (furlough and
current and capital transfers, according to the proportion executed by the
Comú governments in the last financial years. reduced working hours, support for leases and
mortgage payments for commercial premises,
Source: Ministry of Finance.
etc.). As a result, current transfers’ percentage
of total non-financial expenditure fell four 69
Rising interest rates drove financial tenths to 47%, but is still by far the largest
expenditure upwards. chapter of budget expenditure, compared with
the second which is personnel costs.

The other expenditure chapters saw increases in 2022. The entry that increased most was interest
expenditure, 11.2%. The reasons can be found in the rise in expenditure on public debt interest,
associated with the interest rate rise applied to renewals of debt issues and also the new volume
of issued debt. In contrast, the decline in loan interest continued to play in favour of containing
expenditure, but to a limited extent. Expenditure on bank fees also fell because fewer debt
transactions were formalised this year than in the last. Altogether, this raised the share of total non-
financial expenditure of the chapter of interest expenditure to 4.6%, the highest level since 2014.

Operating costs also rose in 2022. The largest increase was in the chapter of consumption of
goods and services (+9%), to €49.5 million, while personnel costs rose 4.9% to €122.6 million.

2. Comú governments

According to the data from the settled budgets of the Comú governments, including financial
assets and liabilities, the total volume of Comú revenue reached the figure of €194.2 million in Andorran economy: general developments | VIII. Public sector
2022, higher than the €174.9 million of settled expenditure. As a result, the combined balance of
the Comú governments was positive (+19.3 million euros) for the third consecutive year, and also
substantially more than in the previous year (when it was +3.9 million euros). This is the result of
higher growth in total revenue than in total expenditure.

If the analysis is limited to non-financial revenue and expenditure, the total settled volume obtained
was €187.6 million and €157.8 million, respectively, resulting in a non-financial cash surplus of