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Spain govt extends free train travel in 2023 budget

Free travel on Spanish commuter and medium-distance trains will be extended into 2023, the government said Tuesday, unveiling a draft budget boasting record levels of welfare spending.

The commuter train scheme was introduced on September 1, with hundreds of thousands of people signing up for a measure initially slated to run until the year’s end in a bid to ease soaring costs.

But it will now be extended throughout 2023, the government said Tuesday, allocating a 700 million euros provision to cover the scheme.

“Within the budget, six of every 10 euros will be spent on welfare, meaning the state will invest the biggest-ever sum on social spending,” Budget Minister Maria Jesus Montero said after the weekly cabinet meeting.

The 2023 draft budget, which was agreed by the Socialists and their hard-left junior coalition partner Podemos, includes an inflation-linked increase in pensions, she said.

It also provides for an extension of the monthly 250 euros housing subsidy for 18 to 35-year-olds who earn below a certain threshold.

Such inflation relief measures will be largely funded by a new temporary “solidarity tax” that will be imposed on those whose net income exceeds three million euros over the next two years, bringing in some 1.5 billion euros.

“The main challenge for our economy is inflation,” said Economy Minister Nadia Calvino.

Spanish inflation eased in September from a nearly four-decade high, thanks to a drop in electricity and fuel prices, falling to 9.0 percent after spending three months in double digits.

Given the ongoing inflationary pressure, the government also lowered its growth estimate for 2023 to 2.1 percent, down from an earlier prediction of 2.7 percent.

“We are making a cautious forecast… given the huge uncertainty of the next few months,” said Calvino, referring to Russia’s ongoing war in Ukraine.

By contrast, the government has slightly revised its growth forecast for this year, seeing the economy expand by 4.4 percent — up from an original estimate of 4.3 percent.

The 2023 budget will now have to be put to parliament, where the government holds a minority but has the backing of Basque and Catalan pro-independence parties