The President of the Independent Authority for Fiscal Responsibility (AIReF), Inés Olóndriz, took part today in the El Norte de Castilla Economic Forum in Valladolid, where she discussed Spain’s economic and fiscal outlook and stressed the importance of public policy assessment in prioritising the use of resources as spending needs become increasingly structural.
Olóndriz said the Spanish economy continues to post solid growth, although against an uncertain international backdrop and with some of the factors that have driven activity in recent years set to lose momentum. The institution’s latest forecasts point to real GDP growth of 2.5% in 2026 and 2.1% in 2027, driven by domestic demand supported by population growth and investment linked to European funds.
On the fiscal side, she recalled that the update to the stability-target monitoring factsheets published on 17 September raised AIReF’s 2026 deficit forecast to 2.7% of GDP. Inés Olóndriz focused on growth in expenditure net of revenue measures, which AIReF currently puts at 6.6% in 2026, compared with the 3.5% envisaged in the Medium-Term Plan (MTP).
The President explained that the flexibility currently provided for under the European framework could allow compliance in 2026, albeit only just. She warned, however, that while this flexibility buys time, it does not eliminate the deviation or the need for adjustment in subsequent years. She also recalled that AIReF expects Central Government and most Autonomous Regions to breach the national expenditure rule as early as 2026.
Planning for the medium term
Over the medium term, AIReF expects growth to slow progressively to around 1.7% by 2030 and considers it necessary to move towards a more balanced growth mix, with a greater contribution from productivity.
On the fiscal side, Inés Olóndriz said that pressures from ageing, debt interest and defence spending will gradually become more significant. Against this backdrop, she stressed that the 2027 budget should help restore planning, transparency and accountability and form part of a multi-year fiscal strategy consistent with European commitments.
Long-term challenges
Over the long term, the President said ageing will increase spending needs for pensions, healthcare and long-term care, compounded by risks from climate change, defence needs, debt interest and the investment needed to raise productivity. All these demands, she said, will be competing for the same limited resources.
Against this backdrop, Inés Olóndriz said setting priorities will become increasingly important and stressed the role of public policy assessment. Assessment provides an evidence base for decision-making, identifies scope for improvement and allows resources to be reallocated, offering an alternative to across-the-board cuts in public spending.
The President recalled that AIReF has been carrying out this work for almost ten years and stressed how it complements fiscal oversight: while fiscal oversight examines the sustainability of public finances, assessment helps determine whether available resources are being used effectively and efficiently.
She referred to the new Spending Review 2026–2030, which should operate as a strategic programme for reviewing public policies and prioritise areas where evidence is genuinely needed and where the results can have the greatest impact on spending quality, sustainability and budgetary decisions. She also stressed the importance of following up on findings and proposals to help ensure they feed into decision-making.
Assessment in Castile and Leon
Lastly, Olóndriz pointed to Castile and Leon’s experience, noting that the region has repeatedly commissioned AIReF to analyse its public policies, and encouraged the Regional Government of Castile and Leon to continue the practice. The President said that systematically embedding assessment makes it possible to learn from experience, improve policies and make better use of public resources.