The Independent Authority for Fiscal Responsibility (AIReF) endorses the forecasts that accompany the 2025 draft budget for the Balearic Islands, which present different growth estimates of the Gross Domestic Product (GDP) in volume terms and at current prices, employment and the GDP deflator for 2024-2025 from the latest estimates of the Government of Spain’s macroeconomic scenario for the country as a whole.
According to the Organic Law on the Creation of AIReF, the macroeconomic forecasts incorporated in the draft budgets of all General Government authorities must include a report from the institution indicating whether they have been endorsed. AIReF had already reported on the macroeconomic forecasts for 2025 for this Region on October 30th, 2024, but given the time that has elapsed since that report, it was advisable to update the macroeconomic projections and hence the endorsement issued by AIReF.
The Balearic Islands estimate GDP growth in volume terms of 2.7% for 2025, which is at the lower end of the range of forecasts by other agencies for the Region and also lower than that forecast by AIReF (2.9%).
It is important to stress that the macroeconomic forecasts for the Autonomous Regions are made in a context of great uncertainty, stemming from the geopolitical environment and based on the latest figures available from the Spanish Regional Accounts for 2023, published in December 2024.
AIReF highlights that the Balearic Islands comply with the recommendation to submit, prior to the publication of the draft budget, information on the macroeconomic forecasts that underpin it, along with the corresponding request for endorsement. The Region also complies with the good practice advice regarding the inclusion of a comparison with other independent forecasts and the provision of information on the econometric techniques, models and parameters used, as well as the assumptions underpinning their forecasts. The Region does not include macroeconomic projections beyond the year for which the budgets are formulated, which is essential for assessing the consistency of the Autonomous Regions’ forecasts with the Medium-Term Structural-Fiscal Plan presented by the Government of Spain. In this regard, AIReF reiterates the best practice advice made in October 2024 aimed at extending the scenarios presented, given that the Structural-Fiscal Plan is valid for four years.
