The forecast depends partly on temporary energy support estimated at about €12 billion. Airef says the deficit would be 1.9% of GDP without that package; its latest estimate puts the overall shortfall at 2.8%.
The revised figure is two tenths of a percentage point higher than Airef’s July forecast. The authority also expects net primary expenditure, the key measure under the EU’s post-2024 fiscal framework, to increase by 7.3% in 2026. That is more than twice the 3.5% rate set in Spain’s fiscal plan and above the 4.7% projected in Airef’s spring progress report. Under the framework, member states are assessed primarily against the trajectory of net nationally financed primary expenditure.
Even with the EU’s planned flexibility for defence spending and certain energy-security measures, Airef expects Spain to exceed the permitted deviation in 2026. The flexibility amounts to three tenths of GDP a year and six tenths cumulatively. In its assessment, the authority says targets for both the annual and cumulative control accounts will also be missed during the remaining years of the fiscal plan. The European Commission’s 29 October 2026 audiovisual event recorded a wider discussion of greater flexibility in EU fiscal rules, including how different member states’ starting positions should be taken into account. The discussion also referred to possible financing through the EU budget and demand-reduction measures.
The scale of the breach remains uncertain. Airef cannot determine whether the government will seek to activate the escape clause for energy measures or whether the government formed after the 29 November elections will submit a new medium-term structural fiscal plan. A larger deviation than currently forecast could alter the pace of debt reduction; Airef projects public debt at 95.4% of GDP at the end of its forecast period. The Commission event also discussed Spain’s defence financing. A speaker said the country was spending close to 5% of GDP on defence, with more than 20% of its 2026 budget spending directed to defence.
Budget scrutiny is also constrained by the absence of regular planning documents. Spain has used rolled-over budgets since 2023, and the government has not submitted a budgetary plan during that period. Airef says the missing stability path and recent budget amendments make it harder to assess the public accounts. This concerns the state’s overall finances, distinct from household tax questions addressed in this Bizum tax explainer.
Temporary energy measures and climate disasters weigh on the revised outlook; the migration emergency in Ceuta adds pressure too. Structural spending on pensions and defence adds to the strain, as do higher debt-interest costs. Airef expects the deficit to ease to 2.6% of GDP next year as temporary measures are withdrawn, then return to around 3% from 2028.
The authority has raised its growth forecasts for 2026 and 2027 by one tenth each, to 2.6% and 2.2%. Stronger domestic demand, supported by private consumption and a labour market benefiting from population growth, drove the revision. Airef also points to October inflation of 4.9%. It expects growth to slow to 1.7% in both 2030 and 2031. On 2 November, Prime Minister Pedro Sánchez presented the government’s broader economic picture, citing quarterly growth of 0.6%, annual growth of 2.7% and employment of 22.8 million people. He said the deficit was at its lowest level in 18 years and that Spain was reducing its debt while growing and creating jobs.
