Moreover, the foreign debt payments of the Treasury should be settled and remittance accounts that comprise a significant part of the liabilities side of the Central Bank’s balance sheet need to be gradually reduced in the long-term. Therefore, the Central Bank holds foreign exchange buying auctions to build up reserves at times where foreign exchange supply increases compared to foreign exchange demand. With the aim of minimizing the impact on supply and demand conditions in the foreign exchange market, the Central Bank has been buying foreign exchange via foreign exchange buying auctions with pre-announced terms and conditions since 1 April 2002 and has been announcing annual auction programs since 2005. Even if the aim is running the auctions according to the pre-announced program, in case of significant developments exceeding the forecasts pertaining to foreign exchange supply, amendments to auction programs can be made with prior notice.
It is particularly useful in that it offers an overview of overall Spanish general (central, regional and local, including the Social Security system) government budgetary policy, providing a broader time perspective of four years. In a country as decentralised as Spain, it is impossible to properly assess public spending and revenue policies without this overview. At the same time, an effective fiscal policy, particularly when the starting point is a budgetary imbalance like ours, should be part of a consistent multi-year plan with specific measures. The Budget and the Stability Programme include macroeconomic projections that point to increases in real GDP in Spain of 2.7% in 2018, and slightly lower levels in the following 5/9  years: 2.4% in 2019, and 2.3% both in 2020 and in 2021. Nominal GDP is expected to increase by around 4.3% over the entire forecasting horizon. The growth forecast and its composition are broadly consistent with the baseline scenario of the Banco de España’s macroeconomic projections I outlined earlier. The Stability Programme envisages an overall general government deficit of 2.2% in 2018, in line with the requirements of the Stability and Growth Pact. That should be conducive to Spain exiting the “excessive deficit” situation still prevailing. For the following years, further declines in the budgetary imbalance are envisaged, until resuming a slightly positive balance in 2021, for the first time since 2007. All tiers of government, including Social Security funds, should attain budgetary equilibrium in this horizon, according to the Programme.