Alert about the large amount of public debt that, if not reduced, will make it impossible to comply with the new fiscal rules


The General Council of Economists (CGE) has maintained its forecast for the growth of the Spanish Gross Domestic Product (GDP) at 1.9%, although this estimate has “an upward bias”, given the good prospects for the next two quarters .

Economists base this forecast on the good expectations of commercial activity in Spain, with the great contribution of the services sector to the economy, predict good performance in the next two quarters, now that the tourist season begins and having dissipated, at least in part, the uncertainty generated in the sector by the drought of recent months.

On the other hand, the expectation of a drop in interest rates in the month of June, of at least 25 percentage points, means that growth expectations are higher at the expense of inflation being affected.

Regarding prices, and given the good evolution of the inflation rate, the Financial Observatory of the General Council of Economists has also maintained its forecast for the average CPI at the end of the year at 3%, while leaving the unemployment at 11.5%.

At the fiscal level, economists have maintained their forecast for the public deficit at 3.4%, four tenths above the Executive’s estimate (3%), while they have left the debt-to-GDP ratio at 106.6%.

Economists have warned about the high figure in absolute value of the debt, especially due to its cost now that interest rates have risen considerably. “We understand that, if this figure is not reduced, it will be impossible for our country to comply with the new fiscal rules of the European Union that came into force on April 30,” they warned in the report.

For its part, the Council has indicated in its ‘Financial Observatory’ that one of the biggest problems facing society is housing, both owned and rented. According to the Bank of Spain, there is a deficit of around 600,000 homes between 2022 and 2025, according to the crossing of supply and demand data.

Although it is planned to eliminate the so-called ‘Golden Visa’ to put restrictions on the purchase of homes by foreigners, arguing that this will solve the increase in home prices, in the opinion of economists the real problem is in the residential market, not in the luxury segment.

Therefore, they consider that this restriction of the ‘Golden Visa’ would not significantly impact a generalized drop in housing prices. “To this we must add that in competing countries in our environment they continue to be maintained, such as Portugal, which, after their elimination, has reinstated them with certain modifications,” the economists have pointed out.

Regarding the ‘Next Generation EU’ European funds, according to the Government, 69,528 million euros have been allocated, of which 35,191 million have been resolved, with a call resolution rate of 56.4%.

Given that the deadline to implement the aid ends, with some exceptions, in June 2026, the General Council of Economists has warned that there is a risk that part of it will be lost. “Tackling this problem should be a priority, given the weight that this aid can have for our economy,” they insisted.