- This assessment is in line with AIReF’s fundamental principles and is in line with the practices of other independent fiscal institutions
- In macroeconomic forecasts, the quality of AIReF’s forecasts has been maintained and they continue to be satisfactory in terms of efficiency, accuracy and absence of bias
- In the fiscal area, the incorporation of 2024 confirms the absence of relevant biases throughout the whole period analysed
The Independent Authority for Fiscal Responsibility (AIReF) today published its Macroeconomic and Fiscal Forecast Assessment, an analysis that reinforces its commitment to transparency. This is the fourth time that the institution has carried out this exercise, which reviews the accuracy, efficiency and possible biases of the forecasts produced by the institution since 2015, on this occcasion incorporating the results for 2024. This exercise is in line with AIReF’s core values and places it on a par with other fiscal institutions that already carry out this type of assessment. This responds to one of the OECD’s main recommendations and to the 2020-2026 Strategic Plan.
AIReF notes that forecasts are always subject to a high degree of uncertainty, accentuated in recent years by the pandemic, the war in Ukraine and other geopolitical tensions. In 2024, moreover, the cost of a series of court rulings and measures linked to the DANA increased the deficit unexpectedly. In such a rapidly changing context, the analysis of forecasting errors becomes even more relevant when addressing potential biases and weaknesses.
Macroeconomic forecasts
AIReF regularly includes an assessment of the Government’s forecasts in its reports. It also carries out an ex post assessment of its own forecasts, which are the basis for analysing the appropriateness of the government’s scenarios. This report presents the fourth assessment and is conducted from two perspectives: short-term and medium-term.
In the short term, it analyses the forecast in 2024. The National Statistics Institute (INE) put 2024 GDP growth at 3.2% in its July 2025 release, well above what AIReF and other analysts had forecast a year earlier. Subsequent revisions raised this growth to 3.5%. AIReF underestimated the contribution of domestic demand and external demand. The largest forecast errors were concentrated in public consumption and private consumption. This underestimation was shared by many analysts and was due to revisions to GDP for the second half of 2023 and to the effect of immigration on the labour market.
In the medium term, the analysis focuses on the possible persistence of biases and includes new metrics to assess the efficiency of forecasts. With the incorporation of the 2024 data, the quality of AIReF’s forecasts is maintained, and they continue to be satisfactory in terms of efficiency, accuracy and the absence of bias. Specifically, the analysis reveals that forecasts for the current year are unbiased and efficient, and continue to be the most accurate among all the bodies considered. However, the tendency to underestimate GDP growth for the current year and the following year has persisted since 2023. On the other hand, employment forecasts continue to show negative biases for both the current year and the following year.
In terms of accuracy, AIReF’s forecasts outperform a baseline forecast and, in general, errors do not recur systematically, except in the case of GDP for the following year, where greater persistence is observed than in the previous evaluation. In the case of gross fixed capital formation, positive deviations remain, possibly due to overestimates of the effect of the Recovery, Transformation and Resilience Plan (PRTR).
Compared with other institutions, no significant differences are observed in terms of biases and accuracy. Overall, AIReF’s forecasts show predictive capacity similar to that of the other bodies, although the institution continues to forecast GDP growth in the current year with greater certainty and shows lower accuracy in its estimates for the external sector.
Fiscal forecasts
In the budgetary area, the inclusion of 2024 confirms the absence of any significant bias in AIReF’s fiscal forecasts over the entire period analysed. In 2024, the deficit forecasts remained stable at 3% of GDP, in line with the Government’s estimates, while the average from the Funcas Panel initially projected 3.6% and gradually converged towards figures closer to AIReF’s forecast, with an estimated deficit of -3.3% in the latest revision. The deficit ultimately came in at 3.2% due to the measures linked to the DANA. Excluding those measures, AIReF’s forecasts were two tenths of a percentage point above the recorded deficit.
Revenue and expenditure forecasts were affected, in terms of their weight relative to GDP, by the denominator effect arising from the revision of the INE series in September 2023 and 2024, which implied a downward correction of more than two GDP points compared with the initial estimate. In euro terms, the revenue forecasts were broadly in line with the preliminary outturn, while projected expenditure was lower due to the measures linked to the DANA and certain court rulings.
AIReF continues to work on improving the areas identified as having the greatest weaknesses. In this regard, it highlights the new PRTR monitoring tool, which has helped reduce errors in certain headings, although the limited availability of information on the plan’s impact in the national accounts lies outside its remit. Since early 2024, improvements have also been made to the forecasting methods for Corporate Income Tax. However, AIReF stresses that it is impossible to anticipate the impact of unannounced discretionary measures, natural disasters or certain court rulings, areas in which greater administrative transparency would help improve predictability.
