Airef cuts its growth forecasts for the Spanish economy this year

BarcelonaThe Independent Authority for Fiscal Responsibility (AIREF, the state agency that oversees public accounts) has lowered its growth forecasts for the Spanish economy for this year and next due to international uncertainty. In response, it has stated that the State will have to take measures starting in 2027 to comply with the fiscal commitments required by European regulations.

Thus, compared to its latest forecasts, the agency chaired by Cristina Herrero has cut its forecast for gross domestic product (GDP, the indicator that measures the size of an economy) growth for 2025 by two-tenths, to 2.3%, and by three-tenths, 2.2%, in the medium term, it expects average annual growth of 1.5% until 2029.

The data from the Airef, which presented the forecast in Madrid on Wednesday, Medium-term fiscal and structural plan 2025-2028, are more pessimistic than those of the Spanish government, which predicts a 2.6% and 2.2% increase in state GDP for this year and next year, respectively. The reason is that, as Herrero explained, Pedro Sánchez's government is more optimistic about the evolution of domestic demand, to the point that it would offset the deterioration of the foreign sector caused by the trade war initiated by the United States. In this sense, the government's estimates for Spain coincide with those of the Barcelona Chamber of Commerce for Catalonia, as the Barcelona chamber also predicts that in 2025 the decline in exports will be offset by the expansion of domestic consumption and investment.

Stabilized Debt

According to Airef calculations, the public deficit of the Spanish government will close 2025 at 2.8%, that is, two-tenths of a percentage point below the 3% established by the European treaties. By 2026, the agency sees a drop to 2.3% and a subsequent gradual rise in the medium term to 2.9% in 2029. In Catalonia, the agency expects the Generalitat (Catalan government) to reach a deficit of 0.6% of GDP in 2029.

Regarding public debt, it expects annual reductions of a few tenths of a percentage point until it reaches a point of stabilization slightly below 100% of GDP over a period of four years.

Regarding the latest progress report on public accounts sent by the Spanish government to Brussels, Airef considers it "lacks ambition." In this regard, the fiscal agency warns that, although it will not be necessary to take spending containment measures this year or in 2026, they do expect them to be implemented in 2027 and 2028.