Central government public deficit hits 4.7 percent of GDP

The public deficit of the central government and the Social Security system in the period January-August amounted to 50.132 billion euros, equivalent to 4.77 percent of GDP. The figure already exceeds the administration’s target for the full year, which is 4.5 percent of GDP.

Outlays in the period amounted to 110.238 billion euros, while revenues were 60.106 billion. The deficit was 23.8-percent higher than in the same period a year earlier.

Despite the blowout in the first eight months, the secretary of state for budgetary affairs, Marta Fernández Currás, expressed confidence on Tuesday that the administration can turn the situation around in what remains of the year and meet its target. She noted the shortfall in the first eight months was only slightly above the figure for the period January-July, which was 4.62 percent.

The government is looking to reduce the public deficit for the whole of the country’s public administrations to 6.3 percent of GDP from 8.5 percent last year. The target for the country’s regions is for a deficit of 1.5 percent.

Overspending by the regions was the main reason for Spain’s failure to meet last year’s target of 6 percent of GDP. The central government has made a series of advance payments to the regions, which have serious liquidity problems.

The European Commission has given Spain another year to bring the deficit back within the European Union ceiling of 3 percent of GDP, which it is now committed to achieving in 2014 instead of 2013.