The Ministry of Treasury has approved the new macroeconomic framework and deficit targets for 2027-2029, with a spending limit that will be a record. The accounts will be presented after the summer.
The Ministry of Treasury has kicked off the process of drafting the General State Budgets for 2027. Last week, the Council of Ministers approved the new macroeconomic forecasts, and this week it will greenlight the deficit targets and the spending cap. The aim is to close the budgetary framework before August and present the accounts by late September or early October.
This Monday, the Government is gathering the autonomous communities in the Fiscal and Financial Policy Council (CPFF) to announce the distribution of the deficit for the period 2027-2029. This will be the first meeting of this body with Arcadi España as Minister of Treasury. The meeting will also address, although not on the agenda, the reform of autonomous financing, a topic that the PP-governed communities have requested to include.
Deficit Targets and Record Spending Cap
The new stability path must comply with the commitments made with the European Commission. The maximum public deficit is set at 1.8% of GDP for 2027, 1.6% in 2028, and 1.5% in 2029. Additionally, net primary spending cannot increase above 3.2% in 2027, and 3% in 2028 and 2029.
In parallel, the Government is expected to approve this Tuesday the spending cap for the General Budgets, which excludes debt and interest. The figure is anticipated to be record, marking the maximum spending limit for administrations for the upcoming fiscal year.
Parliamentary Calendar and Procedures
The stability path and the spending cap must be approved by the Council of Ministers and subsequently ratified by the Congress and the Senate. The parliamentary calendar plans to debate both regulations during the week of 13 July. For readers interested in fiscal evolution, these deadlines are crucial: if not approved, the Government may be forced to extend the current budgets.
The new budgetary framework is the first step towards accounts that are expected to be marked by political tension and the need to comply with Brussels.
The autonomous communities, especially those governed by the PP, have expressed their dissatisfaction with the lack of progress on the reform of autonomous financing. Although the issue is not on the CPFF agenda, several regions have announced that they will raise it during the meeting. The Government, for its part, had already initiated a round of bilateral contacts that was rejected by these communities.
For businesses and citizens, the approval of these limits signifies a medium-term horizon of fiscal stability. The 1.8% deficit for 2027 implies an adjustment from the current 3%, which could translate into less room for new public investments or tax increases. However, the record spending cap leaves some space for expansive policies.
In summary, the Government is accelerating the procedures to have the budgetary framework ready before the summer. The next key date will be the week of 13 July in Congress, where it will be decided whether the stability path moves forward with the necessary support. Meanwhile, the autonomous communities hope that the financing reform does not fall by the wayside.
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