AIREF estima un déficit de PIB del 0.4% en Madrid para 2025 y agrava el pronóstico.
The Independent Fiscal Responsibility Authority (AIREF) establishes that the Madrid community reaches a deficit of 0.4% of the regional Gross Domestic Product (GDP) in 2025 and worsens the estimate.
The independent agency led by Cristina Herrero published on Thursday the report on the initial budgets of public administrations in 2025, where they update their macroeconomic and fiscal forecasts and warn about the risk of economic uncertainty.
The downward revision by AIREF is mainly due to the expected impact of the fiscal sales announced by the community in the inheritance and donations tax (IED) and the downward revision of European funds’ income, apart from the recovery, transformation, and resilience plan (PRTR).
As explained, although the closure of 2024 was similar to estimate in November, with a higher level of resources and jobs, more income was incorporated than expected from European funds related to the closure of the 2014-2020 operational programs, resources that will not be recorded in 2025, thus correcting the funds this year.
The community estimates a deficit of 0.1% of the GDP in 2025 to maintain projects and budget estimates. AIREF, on the other hand, recommends to the regional government to monitor the execution of its budget, periodically updating estimates to increase computer expenses and adopt, if necessary, relevant measures to correct the reference rate, publishing on its site the monitoring of the spending rule.
As mentioned, the closing data of 2024 seem to confirm that expenses will exceed the 2.6% limit and, in this regard, they continue to appreciate the risk of violating the national rule for 2025 in the region, estimating 5.8% compared to the 3.2% reference.
Regarding the calculable expenses for national expenditure purposes, the community believes they will increase by 3.7%, but AIREF offers a lower employment increase and emphasizes that the region does not take into account the impact of income measures this year.
For the European expenditure rule purposes, the net primary expenses of income measures in the Madrid community will increase by 5.4%, exceeding the 3.7% in the recovery, transformation, and resilience plan presented in October.
«A high increase in calculable expenses in 2025 not only implies a risk of non-compliance with fiscal rules but also implies a deterioration of public finances in the medium term and may require more demanding and complicated adjustments,» warns.
The independent agency establishes that community income in 2025, excluding the transformation and resilience funds of the Recovery Plan (PRTR), increases by 2% compared to the previous year, reaching 9.4% of the GDP, although it warns about the impact that the new tax reductions announced by the Madrid community will have.
An evolution that is fundamentally conditioned by the moderate increase in financing system income, the result of a 9% increase in account deliveries and a decrease in system liquidation income after the extraordinarily high figure of 2024. Therefore, it emphasizes that it continues to incorporate in its central scenario, updating the deliveries in the 2025 account.
Regarding expenses, excluding those funded by the PRTR, it is estimated that they will increase by 4% compared to the previous year, placing them at 9.7% of the GDP, in the previous forecast.
The level of debt provided by AIFF in the community will be around 11.5% of the GDP in 2025, a level similar to that provided in the previous report.
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