Spanish public deficit eases slightly

27th May 2009, Comments 0 comments

The deficit for the four months in 2009 was EUR 6.55 billion compared with EUR 7.59 billion during the first three months, says economy ministry.

Madrid – Spain's public deficit eased slightly in the first four months of the year but still compared badly with a large surplus during the same period last year, official figures showed on Tuesday.

The economy ministry said the deficit was EUR 6.55 billion for the four months to April, compared with a surplus of EUR 9.12 billion at the same time in 2008.

The shortfall was EUR 7.59 billion during the first three months of 2009, it added in a statement.

The deficit in the January-April period represented 0.60 percent of gross domestic product (GDP), compared to 0.69 percent during the first three months of the year.

Spanish public finances lurched into deficit at 3.8 percent GDP in 2008 from a surplus of 2.23 percent in 2007 as the government spent heavily to boost an economy which fell into its first recession in over a decade late last year.

In April, the Bank of Spain forecast a public deficit of 8.3 percent of GDP in 2009, way above a limit of 3.0 percent set by the European Union, because of falling tax revenues due to the economic slowdown and the government's extra spending.

The figures include the budgets of the central government, welfare services and local authorities.

Formerly one of the eurozone's chief engines of economic growth and job creation, Spain suffered an abrupt change of fortunes in 2008 when the global financial crisis hastened a correction that was already underway in its key real estate sector.

AFP / Expatica

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