| Author (Person) | Pérez, Claudi |
|---|---|
| Series Title | El País |
| Series Details | 31.03.13 |
| Publication Date | 31/03/2013 |
| Content Type | News |
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Spain admits wide miss of deficit target The Spanish government has admitted that it will miss this year’s budget deficit target of 4.5 per cent of gross domestic product by a wide margin, in the latest sign of the toll that the economic crisis is taking on public finances. Officials in Madrid said on Tuesday that the government was now forecasting a deficit of about 6 per cent of GDP – lower than last year’s shortfall of 7 per cent but a smaller improvement than Madrid originally planned. The European Commission had signalled that it was ready to give Madrid more time to meet its budget targets, but Brussels has yet to set a new ceiling or decide how much longer Spain will have to bring its wayward budget back into line. Under the current agreement, Spain must reduce its deficit to below 3 per cent of GDP in 2014 – a goal that is already in effect out of reach. Spanish government officials point out that Madrid managed to cut the deficit even though the country is in the midst of a sharp two-year recession that has left more than one in four workers out of a job. The unemployment crisis, in particular, has increased public pressure on the government to abandon its austerity drive in favour of policies that could stimulate economic growth. The latest revision to the deficit figure highlights the still-looming gulf between Spain’s official government forecasts and the more gloomy predictions offered by private sector economists and bodies such as the International Monetary Fund. Madrid is widely expected to reveal a significant revision to its growth forecast in the coming weeks; they currently stand at -0.5 per cent against a consensus prediction of about -1.5 per cent. On the deficit, too, the Spanish government may be too optimistic, despite the current revision. According to the European Commission’s own economic forecast, Spain is set to post a budget deficit of 6.7 per cent of GDP this year, before slipping back to a deficit of 7.2 per cent in 2014. Copyright The Financial Times Limited 2013.Article reported that Spain proposed to the European Commission in March 2013 that its deficit-reduction target for the year should be set at 6% instead of the figure of 4.5% previously agreed, which it now wanted to achieve in 2014. However, the article reported that the European Commission was pushing for a target of 5.5% of GDP. The shortfall in 2012 was almost 7% |
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| Source Link | Link to Main Source http://elpais.com/elpais/2013/03/31/inenglish/1364727789_471405.html |
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| Countries / Regions | Spain |
