Spain Expands Tax Cuts, Subsidies by $4.2 Billion as Vote Looms

(Bloomberg) -- Spain will extend a package of subsidies and tax cuts as Prime Minister Pedro Sanchez’s ramps up efforts to win voters over ahead of a snap election next month.

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The Cabinet approved extending by €3.8 billion ($4.2 billion) subsidies for public transport and cuts on the value added tax on energy and certain food staples, due to expire at the end of June, Economy Minister Nadia Calvino said in a press conference Tuesday. The government also announced a 15% deduction on personal income tax for the acquisition of electric cars.

Polls show Sanchez’s Socialist party trailing the conservative People’s Party, which is projected to win the election and form a coalition government with ultra-right party Vox. Voters are turning their back on Sanchez even as the economy grows faster than in other European nations and the country posts the lowest inflation in the eurozone.

The announcement made Tuesday takes the total cost of subsidies and aid put in place to mitigate inflation since 2021 to 47 billion euros, the government said.

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