The Independent Authority for Fiscal Responsibility (AIReF) today reported on the Economic-Financial Plans (EFPs) of the Canary Islands, Castilla-La Mancha, and Extremadura. The three Autonomous Regions were required to submit an EFP following their breach of the expenditure rule in 2024, confirmed in November, as other regions had done last July. Under the Budgetary Stability Law, AIReF is required to report on these plans before they are approved by the Fiscal and Financial Policy Council (CPFF).
In its reports, AIReF assesses whether the forecasts and measures included in these three Autonomous Regions’ EFPs will correct the deviations identified and ensure compliance with the fiscal rules in force during the reference period. The analysis is based on information submitted by the Autonomous Regions, the latest available budgetary execution data, and AIReF’s macroeconomic and fiscal forecasts.
AIReF also assesses the adequacy, specificity, and scheduling of the measures set out in the plans, as well as their consistency with the national and European fiscal frameworks. AIReF reiterates the importance of integrating the Economic-Financial Plans into credible, medium-term budgetary planning to ensure sustained compliance with fiscal rules and strengthen the sustainability of regional public finances.
Canary Islands
For the Canary Islands, the EFP includes revised forecasts for 2025 and 2026 and healthcare spending savings measures, the impact of which is expected this year. However, AIReF continues to see a risk of deviation from the expenditure rule in 2026, risks of deviation from the medium-term expenditure rule, and growth in net primary expenditure excluding revenue measures exceeding that committed to in the Medium-Term Structural-Fiscal Plan (MTP) for general government as a whole. AIReF therefore concludes that the measures included in the plan are insufficient and recommends that the Canary Islands incorporate sufficient additional measures to ensure compliance with the expenditure rule throughout the period, detailing their components, effects, and implementation schedule, and include fiscal balance and debt estimates compatible with such compliance.
Castilla-La Mancha
For Castilla-La Mancha, AIReF continues to see deviation from the 2026 expenditure rule, estimating that eligible expenditure will grow by 4.8% on the previous year. AIReF notes that the Autonomous Region has not introduced any new measures to reduce the risk and that available information has not changed substantially since the November estimates. AIReF also notes that deviations may occur in future and forecasts growth in net primary expenditure excluding revenue measures above that committed to in the MTP. AIReF therefore recommends that Castilla-La Mancha incorporate sufficient measures into the plan to ensure compliance with the expenditure rule throughout the period, detailing their components, effects, and implementation schedule.
Extremadura
Finally, for Extremadura, AIReF notes that the EFP incorporates savings measures that partially reduce the risk of deviation in 2026, as the institution recommended in its latest report. However, AIReF warns that the risk does not disappear entirely. AIReF explains that while the measures reduce the risk, expected expenditure growth at the end of 2025—higher than forecast in November—largely cancels out this effect. AIReF also notes that deviations may occur over the medium term and that growth in net primary expenditure excluding revenue measures may exceed that committed to in the MTP.
AIReF therefore recommends that the EFP include additional actions that can be activated if the planned measures prove insufficient, detailing their components, effects, and timetable, to ensure compliance with the expenditure rule throughout the period.
