The President of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, took part on Monday in the Second Annual Event of the Economic Observatory, organised by MAPFRE Economics and El Confidencial, where she stressed the need to preserve the sustainability of public finances in an international context marked by high uncertainty, increased geopolitical risks, and greater economic fragmentation.
In her remarks, Cristina Herrero noted that, since the pandemic, the global economy has seen a sustained increase in uncertainty, which in 2025 and early 2026 has translated into the materialisation of risks associated with international economic policy decisions. She noted that the effects of misguided policies tend to be persistent and hard to reverse, reinforcing the need for European economies to anticipate and prepare.
The AIReF President stressed that, although economic growth is not directly part of the institution’s mandate, it is a key element for the sustainability of public finances. AIReF’s functions do include reporting on and, where appropriate, endorsing the Government’s macroeconomic forecasts to ensure they provide a sound basis for budgetary policymaking, as well as conducting ex ante analysis of risks to public finances.
Macroeconomic forecasts
According to AIReF’s central scenario, the Spanish economy would maintain real growth of 2.4% in 2026, with a gradual slowdown to rates slightly below 2% by 2030. This outlook reflects, among other factors, moderating global growth, an expected slowdown in migration flows, and an improvement in productivity which, although positive, is insufficient to fully offset population ageing.
Nominal growth would fall from rates above 6% in 2024 to around 3.6% in 2030, reducing the favourable momentum for public debt reduction. Even so, AIReF forecasts a moderate reduction in the debt ratio to levels close to 95% of GDP by 2030, provided no significant shocks materialise.
Fiscal forecasts
Projections point to a reduction in the public deficit to around 2% of GDP in 2026, supported by the withdrawal of temporary measures and fewer one-off operations. From that year onwards, spending on pensions, interest, and investment will exert upward pressure, although the deficit is expected to remain below 3% of GDP until the end of the decade.
Over the long term, AIReF projects trend growth of around 1.3% and an increase of 6.5 points in public spending as a share of GDP, which is not offset by higher revenues. As a result, the downward trend in debt runs its course and even begins to rise—a trajectory that needs to be addressed.
An integrated approach
Cristina Herrero stressed the need to adopt an integrated approach combining growth-friendly policies with prudent, prioritised fiscal policy, in line with the commitments under the new European fiscal framework. These commitments pose a major challenge and are highly demanding given projected spending dynamics. Both AIReF and European Commission forecasts indicate non-compliance with commitments throughout the period, although within the permitted deviation margins for 2025 and 2026.
Finally, Cristina Herrero stressed that uncertainty should not be an obstacle to budget planning or the presentation of draft budgets. She argued for the need to strengthen predictability, consensus, and a sound fiscal framework that ensures the sustainability of public finances and preserves institutional credibility, particularly in a decentralised state such as Spain.
