Social spending—on healthcare, education, and social services—reaches a historic high

The Consell de Govern, following a proposal from the Ministry of Economy, Finance and Innovation, has approved today the draft law for the Balearic Islands’ General Budget for 2025, which amounts to €7.4691 billion. The draft will begin parliamentary processing in the coming days for final approval. This would end the current budget extension and approve the second budget of this Government, contributing to political and fiscal stability halfway through the current legislative term.

This figure represents an increase of €148.4 million (2%) compared to the 2024 budget. The non-financial budget, approved by the Parliament on October 22 of last year, rises to €6.56288 billion (an increase of €197.4 million or 3.01%), while the financial budget—allocated to debt financing—stands at €906.3 million, down €48.9 million from 2024 (a decrease of 5.1%).

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The Balearic Government Approves the Draft Law for the 2025 Regional General Budget, Reaching €7.469 Billion

Record-High Social Spending

Spending on social services—education, healthcare, social welfare, and housing—will reach a historic high of €4.4387 billion, which is €216.3 million more than in 2024 (+5.1%). The education budget will be €1.4165 billion (+€63.8 million, or +4.7%), while the healthcare budget will amount to €2.4459 billion (+€77.6 million, or +3.3%). Social services will receive €389.6 million (+€37.1 million, or +10.5%), and housing will receive €186.7 million (+€37.8 million, or +25.4%).

These increases are largely due to measures introduced by the Balearic Government to attract and retain public sector workers and ensure high-quality public services. These include the reactivation of career development in healthcare, the hiring of 770 teachers and 74 school psychologists, and hardship bonuses to cover difficult-to-fill positions across the islands.

The Government has also reached a legislative agreement with trade unions to improve working conditions for all public employees. This includes responses to longstanding demands, such as standardising residency compensation (to offset the additional cost of living on the islands) starting in 2026, and restoring economic rights that have been frozen since 2020.

Other Key Increases

Water cycle investments are expected to rise to a historic €200 million.

The insularity compensation mechanism under the Balearic Special Regime will amount to €127.8 million. This will be distributed across ministries: €59.18 million for Housing, Territory and Mobility; €28.9 million for Health; €14.76 million for Education and Universities; €8.05 million for Economy, Finance and Innovation; €7.45 million for Agriculture, Fisheries and Environment; €5 million for the Sea and Water Cycle; €2.8 million for Families and Social Affairs; and €1.69 million for the Presidency and Public Administration.

Island Councils and Local Investments

Funding for the island councils, determined by Law 3/2014, will reach €546.7 million:

• Mallorca: €387.2 million
• Menorca: €70.8 million
• Ibiza: €77.4 million
• Formentera: €11.3 million

These councils will also benefit from other measures, such as early disbursement of road infrastructure agreements.

Deficit and Public Debt

The 2025 non-financial budget foresees a zero-deficit scenario for the second consecutive year, ensuring budgetary balance. Public debt is projected to decrease by €21.5 million to €8.4045 billion compared to the 2024 year-end total of €8.426 billion. As a percentage of GDP, debt will stand at 17.7% in 2025—1.1% less than in 2024—marking the lowest rate since 2012 (when it stood at 23.5%).

Tax Reform

The increase in non-financial spending, combined with the projected balanced budget and debt reduction, comes as the regional tax reform is fully in effect. This includes inheritance and donation tax reliefs, reductions in property transfer and document duties, IRPF regional rate reductions, and improved or new deductions aimed at increasing savings and household disposable income.