Page 70 - economic report 2021

To complete the analysis of revenue, we must add that in 2021, €6.8 million were obtained in
revenue from current transfers, mainly relating to the contributions from the Comú governments
to the central Government’s solidarity fund to tackle the pandemic. In the case of real investments
and capital transfers, the contributions obtained were insignificant.

1.2. Expenditure

In 2021, settled non-financial expenditure saw an adjustment that reached €492.1 million, 2.2%
less than in the previous year, after a two-digit increase in 2020 (14.7%). This containment affected
both current expenditure and capital expenditure. The reduction in non-financial expenditure
contrasted with the strong growth in revenue, the opposite of the previous year and the result of
the improving health situation and consequent progressive reduction in the temporary measures
that the central government had adopted to offset the effects of the pandemic on income.

The Government’s real investment fell GOVERNMENT NON-FINANCIAL
to the lowest level in the last 26 years. EXPENDITURE - Thousands of euros Chart 8.6

Total capital expenditure was €58 million,
10.7% less than the previous year, after
reaching the highest level in five years in
2020. So, the investment effort both in
absolute and relative terms (11.8% of total
non-financial expenditure) is far from the levels
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of the previous expansive phase. By chapters,
the reduction in capital expenditure can be
explained by the cut in real investment (-24.6%)
to €25.3 million, the lowest figure in nominal Operat ng costs Capital transfers
terms since 1995. In contrast, capital transfers
increased slowly (4.3%) to €32.6 million. Current transfers Interest Real investment

Note: In 2016, transfers to the Comú governments were no longer
In the case of current expenditure, the decline considered capital transfers (according to previous legislation, it was
recorded in 2021 was shared by all chapters considered that the bulk of the transfers had to be allocated to investment
by the Comú governments) and became current transfers (Comú
The Andorran economy: general developments | VIII. The public sector
except financial expenditure, which saw a governments may allocate these transfers to both current expenditure
and capital expenditure and to reducing debt). From the 2020 budget
strong increase of 48.1%. The reasons for onwards, it was decided to segregate the Comú transfers, between
this can be found in the rise in expenditure current and capital transfers, according to the proportion executed by
the Comú governments in the last financial years.
on public debt interest, associated with the
greater volume of issued debt, and also in Source: Ministry of Finance.
expenditure on fees for bank services, related
to the new issues seen in 2021. In contrast, Debt growth drove up
the decrease in interest on loans continued to f nancial expenditure.
play in favour of containing expenditure, if in a
limited way. Altogether, this led to an increase
in the chapter of financial expenditure’s percentage of total non-financial expenditure, to 3.9%,
the highest level since 2015.

The greatest reduction in current expenditure was concentrated in the chapter of transfers, with
a decline of 3.5%, to €252.5 million, which can largely be explained by the progressive easing of
the special measures adopted by the Government to tackle the economic effects of COVID-19
(temporary suspension of the employment contract and reduced working hours, aid towards rent
and mortgage payments for business premises, etc.). As a result, current transfers’ percentage