The Independent Authority for Fiscal Responsibility (AIReF) approves the forecasts accompanying the draft budget of the autonomous community of Extremadura for 2025prepared by the Regional Executive.
According to AIReF in a press release, Extremadura estimates GDP growth in volume at 1.5%which “lies between the 40th and 60th percentile of AIReF’s estimates” (central forecast of 2%), and is below the lower end of the range of forecasts made by other organisations for the region.
In any case, this organization emphasizes that the macroeconomic forecasts for the autonomous communities “are made in a context of strong uncertainty“, because in addition to the risks arising from the geopolitical environment, in the case of the LACC, there is another “source of fundamental uncertainty linked to the lack of essential information for the development of macroeconomic scenarios of these administrations.”
Specifically, the latest figures available from the Regional Accounting of Spain are those referring to the year 2022, published in December 2023, so that “this lack of information makes it difficult to develop macroeconomic forecasts and budgetary planning for these administrations, which, in a system as decentralized as the Spanish system, it can potentially have an impact on compliance with national and European budgetary rules and commitments.
Thus, AIReF underlines that does not include new recommendations or good practice advice in this report, and highlights that Extremadura complies with the recommendation to submit, before the publication of the draft budget, information on the macroeconomic forecasts that support it and the corresponding request for approval.
This community also complies with the advice of good practices related to the inclusion of a comparison with other independent forecasts and the provision of information on the econometric techniques, models and parameters and assumptions used in their macroeconomic forecasts, the agency notes.
Finally, he points out that the Autonomous Community of Extremadura includes macroeconomic forecasts beyond the year for which the budgets are formulated – including the expected trajectory of the GDP deflator and the macroeconomic impact of the Recovery, Transformation and Resilience Plan -, an issue that “It is essential to assess the coherence of the forecasts of the Autonomous Communities with the Medium-Term Structural Fiscal Plan that the Government will have to prepare in September”, he concludes.
