Economic growth of 1.3% in 2023
The Government foresees a growth of the Gross Domestic Product (GDP) of 1.3 percent for the next year. According to the proposal, the Government has a GDP growth forecast of 6.5 percent in 2022.
The GDP growth forecast for this year represents an improvement compared to the 4.9 percent projected in the State Budget for 2022 (OE2022). The Minister of Finance had already signalled, in September, that he was working with a growth scenario above 6 percent, in line with the forecasts of most national and international institutions.
The Government revised up its forecast for this year's inflation rate by 3.4 percentage points to 7.4 percent, estimating a decrease to 4 percent in 2023, according to the macroeconomic scenario of the budget proposal.
Deficit at 0.9% and debt at 110% of GDP
The Government maintains this year's deficit forecast at 1.9 percent of GDP, estimating a decrease to 0.9 percent in 2023, still according to the macroeconomic scenario of the OE2023 proposal.
The forecast for the weight of public debt at 115 percent of GDP this year is also maintained, predicting a decline to 110.8 percent in 2023, the lowest ratio since 2011, according to the OE2023 proposal.
Update of IRS bands by 5.1%
The IRS scales will be updated by 5.1 percent in 2023, according to the OE2023 proposal.
National Minimum Wage up to €760
The national minimum wage is expected to increase from the current €705 to €760 in January 2023, according to the income and competitiveness agreement between the Government and social partners.
Unemployment rate 5.6%
The Government expects the unemployment rate to stabilise at 5.6 percent this year and next, thus falling from the 6.6 percent recorded in 2021.
Civil service wage increases
The Government has proposed wage increases for the civil service between 8 percent and 2 percent to unions, with a guarantee of a minimum of around €52 per year until 2026.
The minimum annual increase for the civil service will be equivalent to a change in salary level (approximately €52), ranging between 8 percent for the lowest remuneration in the table, which is €705, and 2 percent for earnings from €2,570.82.
Salary increases, advancements and promotions in public administration and other valuations will cost €1,320 million in 2023, according to the report accompanying the budget proposal.
Contrary to previous years, the Government announced pension increases for the coming year at the beginning of September. Pensions up to €886 will increase by 4.43 percent. Those with a value between €886 and €2,659 will increase by 4.07 percent, while the rest (which would be subject to updating taking into account the legal formula in force) will increase by 3.53 percent.
Selective IRC reduction
The Government proposed to the social partners a 50 percent increase in the costs of salary appreciation in the IRC for companies that increase salaries in line with or above the values provided for in the income and competitiveness agreement. The proposal also includes a selective reduction of corporate income tax for companies that invest in Research and Development (R&D).
Spending on public debt interest up
The Government predicts that the State will spend €6,797 million on public debt interest in 2023, an increase of 8 percent compared to the amount budgeted for this year,
Social Support Index updated
The Social Support Index (IAS) will be updated by 8 percent, to €478.7, according to the OE2023 proposal.
The IAS is the reference value for the calculation and determination of various social support, such as family allowance, social benefit for inclusion, the Social Insertion Income (RSI), among others, and can, according to the Government, impact the lives of 1.6 million beneficiaries.
2023 state budget – what are the key points?
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