BRUSSELS (MNI) – There is a risk of Spain missing its 2011 budget
deficit target if growth is lower than the country’s government
currently predicts, Olli Rehn, the European Commissioner for Economic
and Monetary Affairs, said on Monday.
“There is a certain difference in the [budget] deficit forecasts
[of the Commission and the Spanish government], not a very big one, a
difference of 4 points, 6.0% compared to 6.4% [for 2011], and the main
reason is that we have a lower GDP growth projection than the government
and this implies that on the basis of this growth projection and the
decisions so far taken, the deficit of 6% is challenging to be
achieved,” Rehn told reporters at a press conference.
But he added the government has taken the necessary decisions and
that the “Spanish fiscal strategy is on track.”
The Commissioner said there is a “certain risk” of Spain missing
its 2011 targets if growth is lower than the government predicts, and
that, if that were to happen, the country would need to take additional
measures to reduce its budget deficit.
The Commission’s forecast estimate a Spanish budget deficit of
9.25% this year after 2009’s 11.1% gap. The deficit would come in a tad
below 6.5% next year and hit 5.5% in 2012, it forecast.
The Commission foresees Spanish growth next year of 0.75% and 1.75%
in 2012.
Rehn was speaking at a press conference after the Commission
published its economic forecasts, in which it predicted gross domestic
product in the Eurozone will grow 1.7% this year, 1.5% in 2011 and 1.8%
in 2012.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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