Spanish Budget Deficit Deepens
September 3rd, 2009
Spain’s budget deficit has grown to 4.69 percent of gross domestic product in the first seven months of the year, mainly due to the cost of measures aimed at alleviating the effects of the recession, the government said Tuesday.
The deficit swelled to euro49.69 billion ($71.13 billion) through the end of July, compared to euro9.91 billion for the same period the year before, the Economy Ministry said.
The ministry said more than euro25 billion has been absorbed in funding jobless benefits, public works projects, car purchasing incentives and other measures the government hopes will help reboot the economy and palliate the effects of the economic crisis.
Prime Minister Jose Luis Rodriguez Zapatero said last week that the worst of the recession was over for Spain but announced tax hikes to plug the soaring deficit, which is likely to reach 8 percent by the end of the year – nearly triple the 3 percent set under European Union rules.
In less than two years, Spain has slumped from being one of Europe’s main job producers to having the region’s highest unemployment, at 17.9 percent.
The once-robust economy, fuelled by a Spanish property boom, contracted in the second quarter by 1.1 percent over 3 months and by a record 4.2 percent over the year. It was the fourth consecutive quarterly contraction.
Story from Forbes.com
Related Posts
- Spanish Budget for Deficit, not Recession in 2009
- Spain: Public Deficit Could Hit 12% in 2009
- Spanish Budget Deficit Rises to €38.6B
