Overview
- AIReF, which published its update on Wednesday, raised its 2026 deficit forecast to 2.8% of GDP and said the gap with EU commitments will persist through 2028.
- The watchdog estimates primary spending will grow 5.7% a year from 2026–2028 versus the 3.2% annual limit Spain agreed, creating a large cumulative overshoot since 2023.
- AIReF found that annual control margins and the national escape clause cannot absorb the excess and that defence‑related flexibility of up to 0.3% of GDP a year lacks identified eligible measures.
- The report flags a high risk that the central government and most regions will breach Spain’s national spending rule in 2026–2027, with an aggregate deviation around 0.9% of GDP in 2026.
- AIReF urges the Finance Ministry to prepare a medium‑term fiscal strategy, warns against permanent unfinanced spending or tax cuts, and notes a new government could seek to renegotiate the plan with Brussels.