Spanish defecit narrows

 

The country's budget gap grew to 2.8% of GDP by the end of August - increasing from the 2.1% recorded by the end of July, but with the deficit shrinking year-on-year.

Deputy Finance Minister Jose Manuel López Carbajo told a news conference yesterday that the country is still on track to meet its target for 2011.

"All of the country's administrations, including regional governments, must make a continued effort. Our objective of cutting the budget deficit to 6% [of GDP for the full year] is one we can't give up on."

By the end of August the deficit was down 12% when compared to the same period for 2010, however this is not necessarily an accurate projection of how figures are expected to continue for the rest of the year, given that many Government payments are made in Q4.

Revenue from taxes increased by 2.1% in the year to August, thanks in part to higher income tax and IVA payments, which offset a fall in corporate tax receipts.