June 22th, 2024 | 5:19


Euskadi leads in containing public spending this year

Euskadi leads in containing public spending this year

Jeickson Sulbaran

April 12, 2024 | 11:30 a.m.

Euskadi stands out in fiscal management by limiting its spending increase to 4,4% in 2024

While other autonomous communities and local entities are at risk of failing to comply with the spending rule established by the Independent Authority for Fiscal Responsibility (AIReF). This situation could force these entities to present economic-financial plans to rectify their budgets and ensure medium and long-term financial stability.

In the current context of financial supervision, the Independent Authority for Fiscal Responsibility has issued a warning addressed to the autonomous communities and the main local entities in Spain. The message is clear: compliance with the spending rule is not optional, but an imperative need to maintain the health of public finances. Among the communities, Euskadi is emerging as an example of fiscal prudence, registering a moderate increase in spending by 2024, estimated at 4,4%. This percentage contrasts with slightly higher increases in other regions such as Madrid and Catalonia, with 4,5% and 4,8% respectively.

A challenging fiscal outlook in a context of economic uncertainty

AIReF has not only pointed out the risk of non-compliance in various areas of public administration, but has also focused its analysis on the particular case of Euskadi. According to the organization, although Euskadi shows a tendency to control spending, the scenario could become complicated if the Basque Government's deficit forecasts materialize. This scenario would jeopardize compliance with the country-specific recommendation for 2024, crucial to aligning local finances with European fiscal objectives.

AIReF has made an explicit call to the Basque Government to intensify surveillance over the execution of its budget. The recommendation is clear: adopt the necessary measures to adjust spending growth and prevent a structural deterioration of public accounts.. This advice not only seeks to avoid negative repercussions in the short term, but also to ensure sustainable financial stability that can face future challenges.

Additionally, the report highlights the importance of rigorous planning. In a world marked by economic volatility and rapid changes in the global environment, managing public spending effectively is more crucial than ever. The ability to adapt fiscal policies and respond quickly to economic dynamics will be decisive for the economic future of Euskadi and, by extension, of Spain.

The long-term implications of prudent fiscal management

Looking at the bigger picture, it is clear that spending containment is not simply an austerity measure, but an essential strategy to strengthen the economy in times of uncertainty. Proper fiscal management not only protects communities from adverse economic fluctuations, but also provides a framework for sustainable growth and investment in key areas such as education, health and infrastructure.

In conclusion, while the spending path in Euskadi for 2024 has been contained, the real challenge will be to maintain this rigor in the coming years. The regional government, in collaboration with national and European tax authorities, must ensure that the policies adopted are not only effective in the short term, but also pave the way towards a stable and prosperous financial future for all citizens of the province of Bizkaia and beyond. In this sense, AIReF plays a crucial role as a bulwark of fiscal responsibility, constantly reminding public managers that surveillance and forecasting are the best tools to guarantee long-term economic health.

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