- The President of AIReF takes part in the 43rd Seminar held by APIE and the Menéndez Pelayo International University in Santander
- She states that fiscal oversight must move from monitoring annual compliance to adopting a strategic, medium-term approach
- AIReF forecasts GDP growth of 2.2% in 2026 but warns of a gradual slowdown to around 1.7% by the end of the decade
- In the fiscal sphere, it estimates that the deficit will remain below 3% in the medium term but, if current policies remain in place, could reach 6.6% of GDP, with debt at 123% of GDP, by 2050
- AIReF warns that net primary expenditure would grow by 5% between 2025 and 2028, against the 3.4% committed to in the MTP
- It considers it necessary to clarify how fiscal commitments are shared among the different levels of government in order to strengthen the credibility of the new European framework
- AIReF advocates the assessment of public policies as a tool to improve the quality of spending and strengthen sustainability
The President of the Independent Authority for Fiscal Responsibility (AIReF), Inés Olóndriz, said today that fiscal oversight must shift from monitoring annual compliance towards a medium-term fiscal strategy that safeguards the sustainability of public finances and preserves the public sector’s capacity to act in the future. She made these remarks during the 43rd Seminar organised by the Association of Economic Journalists (APIE) and the Menéndez Pelayo International University (UIMP) in Santander.
In her address, Inés Olóndriz stressed that fiscal sustainability is once again central to the economic debate, against a backdrop of an ageing population, low productivity, high public debt and growing spending and investment needs. In this context, she argued that sustainability should not be seen merely as compliance with fiscal rules, but as a necessary condition for sustaining public priorities over time without compromising those of the future.
From annual compliance to a medium-term fiscal strategy
The President of AIReF stressed that the reform of the European fiscal framework adopted in 2024 represents a significant change in the approach to fiscal oversight. Unlike the previous model, which focused on annual monitoring of the deficit and debt, the new framework shifts the emphasis to three elements: the Medium-Term Fiscal-Structural Plans (MTP), the new central planning document that EU Member States must prepare; primary expenditure net of revenue measures; and national commitments on reforms and investment.
She explained that this new approach places sustainability and growth at the core of fiscal governance and strengthens the role of independent fiscal institutions, whose analysis helps improve the credibility, transparency and monitoring of the commitments made.
However, Olóndriz cautioned that the national framework’s alignment with the new European governance remains incomplete. In particular, she noted that the transposition carried out in Spain so far does not sufficiently address how fiscal commitments are distributed among the various general government subsectors, and leaves uncertainties over the practical application of the new framework. In her view, in a decentralised state an aggregate expenditure path alone is insufficient; it must be translated into institutional and territorial terms in order to strengthen shared responsibility, coordination and the credibility of the fiscal framework as a whole.
Favourable economic growth, but medium-term challenges
The President of AIReF also reviewed the institution’s latest macroeconomic and fiscal projections. She stressed that the Spanish economy continues to perform well in the short term, although significant uncertainties remain, linked to the international geopolitical and energy context. Specifically, AIReF forecasts real GDP growth of 2.2% in 2026 but expects a gradual slowdown in the coming years, to around 1.7% by the end of the decade.
In this context, Inés Olóndriz highlighted the importance of boosting productivity as the main driver of the Spanish economy’s potential growth. In her words, productivity is also a key fiscal variable, as it determines the capacity to generate public revenue, reduce debt and sustain the welfare state in a context marked by an ageing population.
Medium-term fiscal improvement, but persistent vulnerability
On the fiscal front, she noted that recent developments in the economy and in public revenue have made it possible to improve the medium-term outlook, with a deficit below 3% of GDP and a gradual reduction in the public debt ratio. However, she warned that long-term structural pressures, such as ageing and rising interest expenditure, will strain sustainability. Specifically, if current policies remain in place, AIReF estimates that the deficit would climb to 6.6% of GDP and debt would rise again to 123% of GDP by 2050.
She also recalled that the new European framework shifts the focus of fiscal oversight to a new variable: primary expenditure net of revenue measures. According to AIReF’s forecasts, this variable will grow by an average of 5% between 2025 and 2028, against the 3.4% committed to. Taking into account the flexibility introduced by the defence escape clause, AIReF estimates that the commitments made to the European institutions will be met in 2026, but not in 2027 or 2028, so additional measures will be required.
Sustainability across all levels of government
During her address, the President of AIReF also referred to the effects of ageing on public finances and to compliance with the pension expenditure rule that AIReF identified in the study published last May. She pointed out that formal compliance with this rule does not, in itself, guarantee the sustainability of the public accounts as a whole.
In fact, she said that the study published by AIReF shows that the pressure associated with ageing affects not only pension spending but also healthcare spending, long-term care and other components of public expenditure, progressively eroding the fiscal space available for other policies. She therefore argued that sustainability should be assessed from a comprehensive perspective, taking in all levels of government.
She recalled that the fiscal commitment made to the European institutions applies to general government as a whole, while spending powers and the pressures arising from ageing are unevenly distributed among central government, the Social Security system, the autonomous regions and local governments. She therefore considered it necessary to move towards greater coherence between the national fiscal framework, the regional funding system and the extraordinary funding mechanisms, to align responsibilities, funding and incentives. She pointed out that fiscal sustainability requires an integrated approach that makes it possible to identify who bears the spending, who finances it and how the fiscal effort is shared among the different levels of government.
Assessment to improve the quality of public spending
Finally, the President of AIReF advocated assessing public policies as an essential tool to improve the quality of spending and meet future fiscal challenges, particularly in a context of limited resources and growing spending demands. She pointed out that sustainability depends not only on how much is spent, but also on how effectively and efficiently public resources are used. Assessment, she added, makes it possible to identify room for improvement, reallocate resources and strengthen the quality of public policies.
Inés Olóndriz concluded that the economic and fiscal challenges of the coming decades demand a medium-term fiscal strategy that is credible, consistent across government levels and compatible with the sustainability of public finances. In her view, shared territorial responsibility, appropriate financial incentives and rigorous assessment of public policies will be essential to confront future challenges on a sounder footing.
