The budget of the central government reflected only a part of the financial resources involved in the execution of fiscal policy. Other official receipts and expenditures, including social security revenues and payments, local and regional government taxation and spending, and the operations of autonomous organizations associated with defense, education, and agrarian development, brought the total amount of government outlays in 1987 to 13,200 billion pesetas, or 41 percent of GDP. Thus, despite the sharp rise in revenues recorded in 1987, the central government deficit narrowed only from 1,659 billion pesetas to 1,623 billion pesetas on a national accounts basis.

Government spending tended to be expansionary. Even in 1987, when government receipts were unusually high because of strong economic growth, a crackdown on tax fraud, and the introduction of a value-added tax in 1986, state expenditures outstripped state income and the government's deficit amounted to about 3.8 percent of 1987's GDP. When regional and local government expenditures were figured in, the total deficit amounted to approximately 5 percent. Budgetary estimates for 1988 indicated that the central government deficit could be held to approximately 3 percent of GDP. Initial budgets, however, have usually underestimated ultimate spending.

Data as of December 1988