The President of the Independent Authority for Fiscal Responsibility (AIReF), Inés Olóndriz, took part today in the Fórum Europa, organised by Nueva Economía Fórum, where she warned that, although Spain continues to enjoy solid growth and a relatively favourable fiscal position in the short term, significant vulnerabilities remain in both the economy and the public finances. In particular, she highlighted the challenges related to productivity, the reduced margin for meeting fiscal commitments, strong growth in expenditure net of revenue measures and the high level of debt, against a backdrop of less favourable financing conditions.
Inés Olóndriz was introduced by the President of the Economic and Social Council (CES), Antón Costas, and then took part in a discussion with the President of Nueva Economía Fórum, José Luis Rodríguez. During her speech, she discussed the economic and fiscal outlook, the need to restore budgetary planning and move towards a medium-term fiscal strategy, as well as the challenges posed by ageing and climate change and the role of public policy assessment.
Solid growth with structural challenges
Turning to the economy, she pointed to the scenario presented by AIReF in July, which projects GDP growth of 2.5% in 2026 and 2.1% in 2027, underpinned mainly by domestic demand, growth in the foreign population and investment driven by European funds. In this regard, she identified productivity as one of the economy’s main structural challenges, at a time when some of the factors that have recently supported activity, such as European funds, will gradually lose momentum as the Recovery, Transformation and Resilience Plan (RTRP) draws to a close.
Inés Olóndriz also referred to international uncertainty and the risks arising from a prolongation of geopolitical tensions, which could feed through to energy and other commodity prices, inflation, financing conditions and economic growth.
Reduced fiscal space and high debt
On the fiscal side, she said the short-term position remains relatively favourable, although fiscal space is becoming increasingly limited. AIReF’s latest estimates, published on Thursday in its stability-target monitoring factsheets, put the deficit at 2.7% of GDP in 2026 and worsen the outlook for meeting European commitments. Growth in net primary expenditure is very close to the permitted ceiling, even taking into account the flexibility provided by the national escape clause. In this context, the President warned of spending growth and the progressive reduction in fiscal space. For subsequent years, AIReF’s forecasts point to non-compliance with the path committed to under the Medium-Term Plan (MTP).
The President also pointed out that Spain’s public debt remains high, increasing the sensitivity of the public finances to changes in financing conditions.
Restoring budgetary planning
In light of these vulnerabilities, Inés Olóndriz argued that the current starting position should be used to strengthen planning and move towards a realistic and credible medium-term fiscal strategy. She said the 2027 General State Budget and the Budgetary Plan provide an opportunity to restore planning, improve transparency and facilitate fiscal oversight and accountability.
She also stressed the need to begin preparing the next MTP well in advance, which must be submitted before April 2028. AIReF believes the new Plan should constitute a genuine fiscal strategy, with comprehensive scenarios, specific measures and a clear allocation of responsibilities among the different levels of General Government. AIReF also considers it necessary to move forward with reform of the national fiscal framework to improve its consistency with European rules.
Long-term challenges and public policy assessment
The AIReF President also addressed the challenges posed to the long-term sustainability of the public finances by factors such as population ageing and climate change, and argued that these pressures need to be incorporated more systematically into budgetary and fiscal planning.
Finally, she highlighted the role of public policy assessment against a backdrop of growing needs and limited resources. In particular, she noted that the end of the RTRP implementation period opens a new phase in which outcomes will need to be assessed. She added that the new Spending Review cycle provides an opportunity to include some of these policies and make use of the granular information developed by AIReF through its RTRP Observatory.