The Independent Authority for Budgetary Responsibility (AIReF) estimates that the growth of net spending in Spain during the period 2025-2031 It will be 3.6%, compared to the 3% committed by the Government in the Fiscal and Structural Plan sent to Brussels to comply with the new budgetary rules.
In the report published this Tuesday, AIReF warned that The expenditure commitments assumed by the Executive in the Fiscal and Structural Plan do not guarantee the achievement of the objectives of the deficit and public debt planned by the Government itself. Concretely, he estimates that respecting the growth rates of expenditure committed by the Government would bring the public deficit to 1.6% in 2031, compared to 0.8% planned by the Government.
These differences extend until 2041with a Government Plan deficit of 2% of GDP compared to 3.3% in the AIReF adjustment scenario. At the same time, the independent body warns that the debt would rise to 87.5% of GDP in 2031, compared to 76.8% forecast by the government in the budget plan.
On the AIReF stage, The spending trajectory committed to in the government’s budget plan is not sufficient to deal with the impact of aging. in the public accounts and allow the debt to follow a downward trajectory.
Thus, the organization calculates that to reach the 0.8% estimated by the Executive, primary expenditure net of measures would have to increase to 2.8%, against the 3% projected by the Government.
The Spanish plan does not offer enough details
AIReF highlights that the Spanish plan, although it may comply with the European Commission’s June guidelines, does not offer enough detail to be considered a useful medium-term budget planning tool.
The president of AIReF, Cristina Herrero, regretted that Spain was one of the countries that gave the least information on its budgetary and structural plan. medium term like Italy and Portugal, which offered additional non-obligatory information on macroeconomic variables, while proposing a complete budgetary scenario of income and expenditure for the period.
According to the independent organization, the plan does not contain any information on the budgetary scenario beyond 2024 neither for the group of Administrations nor by subsectors. It also does not include a detailed macroeconomic picture beyond 2026.
It certainly includes a regulatory commitment in favor of the evolution of primary expenditure net of income measures, but It does not explain how this commitment should be respected.neither in the form of specific measures or broad lines of action, nor in the degree of effort to be made by each sub-sector. For this reason, AIReF considers this to be a clear step backwards from the information contained in the Stability Program Update, the document it replaces.
Little involvement of the AATT in the plan
On the other hand, AIReF underlines the non-involvement of territorial administrations in the development of the planthe absence of presentation or discussion of the Spanish project in Parliament and the lack of participation of the AIReF in the preparation process, which happened in other countries, which, for Herrero, were essential to promote a authentic national ownership, one of the elements that conceptually support the new framework of rules.
In addition, AIReF criticizes the fact that no proposal for reform of the national budgetary framework has yet been known and the lack of approval of stability targets hampers the budgetary processes of all administrations. Given this lack of definition, the risk persists that administrations will prepare budgets that do not comply with the European and national budgetary framework, as has also been highlighted in previous reports.
In this context, The AIReF recommends that the Ministry of Finance take advantage of the transposition of the directive on national tax frameworks to articulate a budgetary framework credible and effective medium-term policy ensuring the coherence, uniformity and effectiveness of the national budgetary framework and makes recommendations to adapt the national spending rule to the European spending rule, both in its practical application and through regulatory changes necessary.
