Spain say it won't reach EU deficit target until 2017

MADRID – The Spanish government is setting a new budget deficit target of 3.6 per cent of GDP for 2016 and says the figure won’t fall below the EU ceiling of 3 per cent until 2017, a year later than planned.

Spain is readjusting its estimates after registering a deficit of 5 per cent last year, instead of an agreed 4.2 per cent. It initially envisaged a deficit of 2.8 per cent for 2016.

The Economy Ministry said Tuesday the deficit will drop to 2.9 per cent in 2017.

The government blames the overspending on Spain’s autonomous regions and plans to trim 2 billion euros ($2.3 billion) from this year’s budget.

Spain had been battling to slash its deficit from an 11.2 per cent high it reached in 2009 during its economic crisis.