The Government Council has approved the non-financial spending ceiling for the next fiscal year, which exceeds that of 2026 by €769 million. The Ministry of Finance is now starting to draft the regional budget.
The Government of the Canary Islands has set the non-financial spending limit for the 2027 General Budgets at €12.912 billion. The figure, approved by the Government Council at the proposal of the Ministry of Finance and Relations with the European Union, led by Matilde Asián, represents an increase of €769 million compared to the initial budget for 2026, which is a 6.3% increase.
This spending ceiling is the maximum amount the regional government has to meet the needs of the Canary Islanders, with special emphasis on basic services: health, dependency, education, and access to housing. According to government sources, these areas will receive the majority of resources as a priority.
The approval of the spending limit complies with the Organic Law on Budgetary Stability and Financial Sustainability (LOEPSF), which requires autonomous communities to set this ceiling before August 1. From now on, the Government of the Canary Islands will begin drafting the budget project for 2027, which must be submitted to the regional Parliament before October 31 for processing.
Fiscal uncertainty and reference framework
The context in which this limit is approved is marked by significant uncertainty regarding the national budgetary framework. The Congress of Deputies rejected the central government's proposal on budgetary stability and public debt objectives for the period 2027-2029 on two occasions, the latest being on July 23. With no approved stability path, the only available reference framework is the Medium-Term Fiscal and Structural Plan (PFEMP) of the Kingdom of Spain 2025-2028, validated by the European Union, which sets a deficit target of 1.8% of GDP for 2027 for all public administrations.
However, this plan does not allocate financing capacity among the different subsectors. Therefore, the establishment of the spending limit has been carried out in a context of high uncertainty, as acknowledged by the Canary government.
To calculate the ceiling, the Vice-Ministry of Economy and Internationalisation of the Government of the Canary Islands has considered a central scenario that forecasts a nominal GDP growth of 2.9% for 2027. This estimate is based on a real GDP increase of 2.0% in 2026, which would moderate to 1.0% in 2027 and 0.9% in 2028.
Spending rule and revenue forecast
The LOEPSF, still in force as the new European fiscal framework has not been transposed into Spanish law (the deadline expired on December 31, 2025), establishes that the variation in computable spending cannot exceed the reference growth rate of the medium-term GDP of the Spanish economy. The Ministry of Economy has set this rate at 4.0% for 2027. The application of this rule results in an estimated deficit of €65.74 million for 2027, representing -0.1% of GDP.
Regarding revenues, the Ministry of Finance has indicated that those from the autonomous financing system will grow by more than 8%, including advance payments and the settlement for 2025. The Canary government has considered a total of €8.881 billion for this concept, pending final figures. For the Canary Financing Block (BFC), the Canary Tax Agency has made a linear projection of revenue until June 2026, applying the macroeconomic variables from the Vice-Ministry of Economy to estimate the 2027 fiscal year.
The approved spending limit may vary depending on the final amount of expected revenues for 2027 in terms of affected financing, as well as if there are changes in state fiscal rules.
The Minister of Finance, Matilde Asián, has emphasised that the aim is to respond to the needs of the Canary Islanders, prioritising essential public services. The regional government is now working on preparing the budget, which must be ready for debate in Parliament before the end of October.
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