Spanish regions miss deficit target in first half of 2011

8th September 2011, Comments 0 comments

Most of Spain's powerful regions missed deficit targets for the first half of 2011 but they could still catch up before the year's end, Finance Minister Elena Salgado said Thursday.

Annual budget shortfalls and big debts in Spain's regions are a major concern among investors who fret about the country's ability to balance its books and repay government bond holders.

The overall budget deficit for the 17 semi-autonomous regions amounted to 1.2 percent of gross domestic product at the end of June, deeper in the red than the targetted 0.75 percent of GDP, she said.

But the regions can still meet the end-year target of a deficit of 1.3 percent of GDP if revenues grow and spending can be controlled, the finance minister told a news conference.

Only five of the regions had budget finances compatible with their end-of-year targets, Salgado said.

"In other cases the necessity to implement balanced financial plans that were approved has become clear," she said.

"Over the whole of the year and with the implementation of the measures it is possible for us to be capable of meeting the deficit target."

The central government will meet with the 12 regions that were not on track to meet their deficit targets starting next week to ask what their plans were for turning their accounts around, Salgado said.

"These are not bad figures," she added.

A breakdown showed non-financial income in the regions fell 3.59 percent in the first half of the year compared to the level a year earlier while spending rose 0.48 percent.

Spain is seeking to slash the total public deficit to 6.0 percent of gross domestic product by the end of 2011 from 9.2 percent in 2010. It aims to reach the EU-agreed ceiling of 3.0 percent by 2013.

© 2011 AFP

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