Spain to reach their deficit targets even if they don't meet their growth targets
Spain says that they will meet their budget-deficit target next year even if growth undershoots the government’s target, and the country’s banks don’t pose a risk to the sovereign’s solvency, the OECD said.
Even if growth doesn’t reach the 1.3 percent forecast by the government, “we still think that the 6 percent deficit can be reached,” OECD economist Andres Fuentes said in an interview with Bloomberg Television today. “There’s no risk that government support for banks would have to take proportions that would endanger in any way the solvency of government finances.”
Facing a surge in borrowing costs, Spain is trying to convince investors it can cut its budget deficit from 11 percent of gross domestic product last year while shepherding the economy back to growth after an almost two-year recession. Support for the Socialist government is slumping as it implements the deepest austerity measures in three decades and plans to pass a pension overhaul on Jan. 28.