Catalonia Plans To Cut Public Spending By 10 pct

 

Catalonia is both one of the richest regions in Spain as well as one of the one holding the most regional debt, but is nonetheless battling to meet the deficit reducing targets imposed on it by central government.

The regional economy of Catalonia is equal to that of Portugal, but had the third- largest budget gap in 2010, standing at 3.86% of GDP, and had the second-highest debt, at 19.2% of GDP in Q2 of 2011.

The expenditure of the regions accounts for a third of all public spending, as it controls the budget for health and education, which both play an important part in attempting to reduce the country's deficit to 6% of GDP by the end of 2011 from 9.2% in 2010.

Catalonia was just one of the Region's who were called to Madrid to meet with the Minister of Economy last week to discuss adjustment plans with each of the 12 regions who returned a deficit above 0.75% in Q2. Catalonia's shortfall stood at 1.01% according to preliminary figures, which are often subject to adjustment.

The region plans to cut public spending by 10% this year and revenues should also be bolstered by the sale and leaseback of regionally-owned buildings as office space.