Analytics
The best Experts' Views, Marks and Forecasts on Economics >>
-
1 June 2011
Spain central government deficit falls over 50 percent
Source: Yahoo! UK &Ireland Finance
MADRID (Reuters) - Spain's central government deficit was more than halved in the first four months of the year on an annual basis, which its Economy Minister said put the country on course to meet its objectives this year.
The central government deficit, which does not include the social security system or regional government accounts, stood at 0.22 percent of gross domestic product January to April, or 2.45 billion euros (2.14 billion pounds). That was down by 53 percent from the same period a year ago.
The government said the fall was largely the result of a 4 percent rise in taxes, while value-added tax income rose by almost 12 percent. VAT was hiked to 18 percent from 16 percent from July 1 last year.
Spain is frantically trying to assure markets it will be able to slash its public deficit this year despite a weak economy and not become the fourth euro zone country to call for a bailout.
"The slight recovery in the economy and the fiscal consolidation measures are the reason for the fall in the deficit," said Economy Minister Elena Salgado.
"We are on a perfect course to meet the objective that we set."
Spain aims to cut its public deficit to 6 percent this year from 9.2 percent in 2010. Salgado also said the country was on course to meet or beat its debt to GDP ratio target of 68.7 percent this year, which rose to 60 percent in 2010.
Spain's regions might have a tougher task in meeting their own deficit targets this year. Salgado said that half were on target this year, while others were being asked for plans to put their deficit objectives back on track.
(Reporting by Paul Day; writing by Nigel Davies)
