Social Security posted a €2.885 billion surplus up to April, the highest level in ten years and decisive for public finances.
Source: Adobe Stock
Author: Redaction
Record surplus in Social Security
Social Security closed the first four months of the year with a €2.885 billion surplus, the highest level recorded in the first four-month period of the past decade. This performance reinforces the role of Social Security as one of the main pillars of balance in public finances, in a context where the overall state balance has worsened.
The result represents growth compared to the same period last year and reflects the strong dynamics of the Social Security contributory system, which continues to benefit from positive labour market developments.
Revenue and expenditure of the contributory system
Social Security’s performance is mainly driven by the increase in contributory revenue, which grew by around 8% in the first four months of the year. This increase was driven by a higher number of workers contributing and rising average wages, as well as a decline in registered unemployment.
On the expenditure side, Social Security recorded a more moderate increase, below the level forecast in the State Budget. Old-age pensions, the main component of Social Security expenditure, even recorded a slight year-on-year decline, explained by base effects linked to extraordinary adjustments in the previous year.
Impact on public accounts and outlook
The Social Security surplus had a decisive impact in mitigating the public administration deficit, helping to offset the deterioration in the state balance. Without this contribution from Social Security, the overall deficit would be significantly higher.
Despite the positive performance, future prospects depend on economic growth, employment trends and the ability to sustain contribution growth. Population ageing and pressure on social spending continue to represent structural challenges for the medium-term sustainability of Social Security.
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