Publications

The Historical Balance of Public Sector Borrowing Requirements (HBPSBR) was 51.3% of GDP at the end of 2024. We expect the HBPSBR to be 52.6% at year-end with a public deficit and PSBR of 3.8% and 4.3% of GDP, respectively.

Spain needs to recalibrate its fiscal policy to ensure a greater emphasis on spending in production, infrastructure, education, and new technologies. This would help boost long-term growth and improve well-being.

The Historical Balance of Public Sector Borrowing Requirements (HBPSBR) was 51.4% of GDP at the end of 2024. We expect the HBPSBR to be 53.0% at year-end with a public deficit and PSBR of 3.8% and 4.3% of GDP, respectively.

The public deficit looks to have ended 2024 at 2.8% of GDP (excluding the funds set aside to support the victims of the flash floods that struck in October). It is exactly the size of the fiscal imbalance recorded back in 2019.

There are currently seven autonomous regions of Spain without a budget (rolled over), in territories where the population represents 43% of the total in Spain. In addition, the central government is still working with the 2023 budget.

We keep our GDP growth forecast for 2024 unchanged at 1.2%, and 1.0% for 2025; the favorable impact of economic activity in 2H24 is offset by lower exports and investment in the face of new tariffs next year.

Spain faces a fiscal adjustment of around 2.5 percentage points of GDP over the next few years. Its debt and public deficit levels make it vulnerable and must be improved through a more efficient set of public policies.

The Historical Balance of Public Sector Borrowing Requirements (HBPSBR) was 47.2% of GDP at the end of the first semester. We anticipate that this balance will be 50.8% by year-end.