Spain's government approves record €226 billion spending ceiling for 2027, up 6.6%

A new spending high

The Council of Ministers on Tuesday gave the green light to a record non-financial spending ceiling of 226,032 million euros for the 2027 budget, an increase of 14,006 million euros, or 6.6%, over the limit set for 2025. That earlier ceiling never underpinned a full budget after the government chose not to present public accounts. The new cap was described by Finance Minister Arcadi España as the base for accounts that will be "ambitious in social terms and responsible in fiscal terms."

The public accounts we will present will include the largest resources in history for housing, scholarships, dependency, fight against gender violence or R&D, they will shield our welfare state, promote equal opportunities and guarantee quality public services with always universal vocation.

The approved ceiling marks the first formal step toward drafting the 2027 state budget, although the final bill still faces a difficult vote in parliament where the minority coalition lacks a guaranteed majority.

Deficit and debt targets

Alongside the spending cap, the government approved the stability programme for 2027–2029, setting a path to bring the overall public deficit down from a projected 1.8% of GDP in 2026 to 1.5% in 2027, 1.4% in 2028 and 1.3% in 2029. The central administration will shoulder most of the adjustment, with the deficit target for autonomous communities kept at just 0.1%, meaning no additional fiscal effort is demanded from the regions.

Public debt is also set to decline: from 99.1% of GDP in 2026 to 97.6% in 2027, 96.4% in 2028 and 95.3% in 2029. A separate spending rule limits expenditure growth to 4% in 2027, 3.8% in 2028 and 3.6% in 2029.

The stability path sets the targets that will allow us to comply with fiscal rules. The deficit objective will be 1.8%, a reduction of three tenths. The Central Administration will bear the weight of this adjustment, setting 0.1% for the autonomous communities, which are therefore not required to make an additional fiscal effort.

Deliveries to local authorities will jump by around 8%, and town halls will receive the largest financing figure in their history, with increases close to 10%, Spain added. The offer to the regions includes 5,849 million euros earmarked for public services.

Political friction and parliamentary outlook

The coalition partner Sumar pushed the Finance Ministry to raise the initial ceiling, extracting an extra 1,500 million euros beyond the first draft, according to sources cited by EL PAÍS. Both sides described the negotiations as "habitual" and cordial.

In the political arena, the government faces opposition from the Popular Party, which rejected the fiscal proposals at Monday's Fiscal and Financial Policy Council. Spain described the PP's stance as "irresponsible" and "disloyal to the institutions."

I ask the PP to reflect. It is not the time for partisanship and playing electoral games. We must vote for the interests of the country and not for the orders from Genova Street. I ask for a sense of State and common sense; no tactical manoeuvres.

The stability path, a prerequisite for drafting the budget, must now clear a challenging parliamentary vote where the executive does not, as yet, have sufficient support.