Sunday, March 3, 2024

Spain extends some inflation measures until 2024

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Spain has extended until 2024 a series of measures to help its citizens withstand high living costs even as inflation slows.

Like other European countries, Spain is facing a cost-of-living crisis following the coronavirus pandemic, exacerbated by the impact of the Ukraine war on energy prices.

“This new phase will serve to consolidate the progress achieved over the past five years,” Prime Minister Pedro Sánchez, who was re-elected as prime minister in November, said at a press conference after his cabinet approved the new policy. he said.

Sanchez said gross domestic product (GDP) is expected to grow by almost 2.5% this year. The government’s previous GDP growth forecast was 2.4%.

Sanchez added that pensions would be raised by 3.8% in 2024, in line with the average inflation rate over the past year. The increase will cost an estimated €7.3 billion, the Ministry of Social Security said.

Among the measures are extending subsidies for minors and young people using public transport to all public users, and reducing VAT on essential goods such as fruit and vegetables, pasta and cooking oil. It also included an extension.

The controversial so-called windfall tax for energy companies, which brought in around 3 billion euros in revenue in 2023, will now allow companies to partially offset the 1.2% tax if they invest in renewable energy projects Adjusted.

A similar tax on banks will remain unchanged in 2024, under an agreement between Sanchez’s Socialist Party and its junior coalition partner, the far-left Smar party.

Some measures will be phased out.

Mr Sanchez said the VAT cut on energy bills would reduce the tax rate to 5% during 2023 and gradually return to 21%. According to a Budget Ministry official, the 21% value-added tax on gas bills will be reinstated in April.

The government announced in a statement that the electricity tax rate will be raised to 10% in 2024.



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