Spain's government re‑approves spending ceiling and deficit path after parliamentary rejection

The Spanish Council of Ministers has again approved the non‑financial spending ceiling and the fiscal deficit trajectory for the 2027‑2029 state budget after the Congress of Deputies rejected the proposal. The deficit target is set at 1.8% of GDP for 2027, falling to 1.6% in 2028 and 1.5% in 2029, with the central administration absorbing most of the shortfall while autonomous communities are limited to a 0.1% deficit, amounting to about €5.8 billion. The earlier parliamentary vote recorded 167 in favour, 178 against and five abstentions, with PP, Vox, Junts and UPN voting against and Podemos and a Compromís deputy abstaining. The government plans to present the measures again on 23 July, anticipating a similar outcome. If the second vote also fails, the 2027 budget will proceed under stricter fiscal rules for the regions, still within EU limits. The spending ceiling has been set at €226.032 billion, a 6.6% rise, and a public‑spending rule of 4% of GDP for 2027, decreasing to 3.6% by 2029. Opinion pieces note the country's strong macro‑economic performance amid concerns over inflation, housing costs and political polarization, but all focus on the same fiscal‑policy process.