Spanish government deficit falls sharply

28th July 2010, Comments 0 comments

The budget shortfall of Spain's central government shrank by 24.7 percent during the first half of the year on the back of higher tax revenues, the government said Wednesday.

The central government budget deficit is distinct from the overall public sector budget, which includes the balances of the central government, the social security system and regional and local administrations.

At the end of June, the central government budget shortfall stood at 29.8 billion euros (38.7 billion dollars), equal to 2.83 percent of gross domestic product, down from 39.5 billion euros or 3.76 percent of GDP, a year earlier, the finance ministry said in a statement.

Sales tax revenues rose 24.5 percent over the same time last year to 24.5 billion euros while income tax revenues were up 3.6 percent at 30.3 billion euros.

The government is under pressure to bring the overall public sector budget deficit down to the eurozone limit of three percent of GDP by 2013 from 11.2 percent last year.

Spain has been named along with Portugal as a possible new weak link in the eurozone after debt-laden Greece had to be bailed out in May.

© 2010 AFP

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