The Independent Tax Accountability Authority (AIREF) increased to 2.9% its forecast for gross domestic product (GDP) growth for the year 2024 in Spain, compared to the 2.4% estimated in July, and improved compared to 1.9% to 2.3% its projections for the year 2025. On the budgetary level, the AIReF predicts that the deficit will start a ascending path until ending at 2.9% in 2029.
In his report on the fundamental lines of Budgets of Public Administrations of 2025, the independent body led by Cristina Herrero estimates that economic growth will slow to 2% in 2026 and, subsequently, will gradually decrease until reaching 1.5% in 2029.
AIReF estimate of GDP
While in the field of priceAIReF forecasts a deceleration of the inflation deflator GDP and calculates that after increasing 2.9% in 2024 and 2.3% in 2025, its growth rate will stabilize at an annual rate of 2.1%, slightly higher than the consumer price index.
Ascending trajectory of the deficit
On the budgetary level, the AIReF estimates for all Public Administrations a stabilization of the deficit to 2.7% of GDP between 2025 and 2027, after closing 2024 with a deficit of around 3%. Subsequently, the independent authority forecasts that the deficit will begin an upward trajectory until reaching 2.9% in 2029.
“After the withdrawal of measures aimed at mitigating price crisis and energy in 2025, the margin to reduce the deficit without adopting additional measures is exhausted”, warns the organization led by Cristina Herrero in its report.
By subsector, AIReF estimates that Central administration will reduce its deficit in 2025 to 2% after the increase in 2024 due to the liquidation of territorial financing systems and will begin an upward trajectory up to 2.5% in 2029, weighed down by the increase in the interest charge and increased military investment.
For its part, the deficit of Social security funds will stabilize at 0.2% of GDP throughout the projection horizon, while the deficit of the autonomous communities will increase again in 2025 to 0.5% due to the normalization of the flows of the financing system and will then improve slightly until stabilizing between 2028 and 2029 at 0.3% of GDP.
For local businesses, AIReF estimates medium-term stabilization at a level surplus by 0.1% after reaching balance in 2025 and 2026.
