. 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. for 2018, the drive to correct the budgetary imbalance is totally concentrated in central government and in social security funds, which should reduce their respective deficits by 1. 2 pp and 0. 4 pp of gdp to 0. 7 % and 1. 1 %. conversely, the targets for regional and local government for 2018 are less demanding than last year and stand at - 0. 4 % and 0 % of gdp, respectively, compared with - 0. 3 % and a surplus of 0. 6 % posted by these administrations in 2017. the fulfilment of these targets and the macroeconomic projections should lead to a decline in overall general government debt to 97 % of gdp in 2018, and 89. 1 % in 2021, down 1. 3 pp and 9. 2 pp, respectively, on 2017. significantly, practically the entire adjustment in 2018, and somewhat more than two - thirds of that in the period 2018 - 2021, would be due to the cyclical effect, whereby the structural budgetary effort would be relatively modest. in terms of its composition, the stability programme envisages an increase in revenue somewhat outpacing that in gdp, in line with what occurred in 2017. expenditure, meantime, after having posted very low growth in the past four years, is expected to increase by 2. 7 % on average over the 2018 - 2021 period, although its weight in gdp will continue to diminish. on the revenue side, the stability programme includes the personal income tax cuts included in the draft budget for 2018, which mainly affect the lowest - earning taxpayers, and which are expected to reduce the revenues relating to this tax in 2018 and 2019. this would be partly offset by the introduction of a new tax on certain digital services, which might contribute to raising resources by around €600 million in 2018 and by €1. 5 billion in 2019, according to the programme. however, this new instrument is still relatively undefined, meaning it is difficult to judge its tax - raising potential. overall, and as stated in my last appearance before parliament in relation to the budget

in line with the standards set by our legislation and european regulations. i would underscore, too, the challenge posed by the ageing of our population, in particular for our pension system. this is essentially a medium and long - term challenge ; but for that very reason, tackling it appropriately is more difficult than other, shorter - term challenges. the latest social security reform, in 2013, introduced two automatic adjustment mechanisms ( the sustainability factor and the revaluation index ) which sought to ensure a balance between the system ’ s revenue and expenditure. the draft budget and the stability programme update have introduced measures to increase pensions above the level established by the revaluation index, in 2018 and 2019, and to delay the entry into force of the sustainability factor, from 2019 to 2023. allow me to reiterate what i have said in various addresses regarding this matter : it is a priority that we define, in accordance with social preferences, the substitution rates for the pension system that it is sought to ensure ; and then, that we adjust revenue accordingly, so that sustainability is ensured. i believe this is a structural issue, requiring a debate not confined to the habitual discussions of an annual budget. conclusions to conclude, i wish to highlight the fact that the spanish economy is in its fifth consecutive year of growth, with the prospect that this trend will continue in the coming years, albeit at progressively more moderate rates. set against this baseline scenario are a series of risks, which might shorten or moderate the current upturn. accordingly, efforts to continue improving the spanish general government budgetary position should not be delayed, so as to be able to effectively withstand potentially negative future developments. in this respect, fulfilment of the objectives set in the draft state budget for 2018 and in the recent stability programme update is crucial. success will require strict implementation of spending policies and the continuous monitoring of revenue. 8 / 9 as this is my last appearance before the senate as governor of the banco de espana, and to conclude, i should like to express my gratitude for the consideration that has always been extended to the bank and to me in this chamber, and for the quality of the interventions and questions raised on which i have had to comment. i have always thought, and have said so on different occasions, that the lower and upper houses are the “ natural fora ” in which an institution such as the banco de espana should preferentially express itself, cooperating and contributing, as best it