Spain's central government raises growth forecast to 2.6% as budget approval stalls

The Spanish government presented a new macroeconomic update, lifting its 2024 growth forecast to 2.6% and outlining expectations for the economy to expand above 2% through 2029. The update also projects a decline in unemployment and the fiscal deficit, emphasizing a more optimistic fiscal narrative. Politically, the announcement follows a parliamentary motion that, by an absolute majority, called on Prime Minister Pedro Sánchez to resign or face a confidence vote amid corruption investigations, underscoring the government's lack of a solid majority and suggesting an electoral motive behind the optimistic figures.

In the autonomous community of Galicia, President Alfonso Rueda announced the initiation of preparations for the 2027 regional budget. The Xunta highlighted the importance of political stability for planning investments and maintaining public services. The regional budget aims to boost health, education, housing and employment programmes, and it is being drafted while the national government continues to operate on provisional accounts dating from 2023. Galicia’s plan is presented as a contrast to the central government's delayed budget approval, emphasizing predictable fiscal management for citizens and investors.