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Spain's 2020 Budget Deficit Rises just above 10% of GDP

Spain’s budget deficit spiked to eight-year highs last year after social spending increased and tax revenue plunged due to restrictions imposed to tame the COVID-19 pandemic, but the gap ended below the government’s forecast.

Budget Minister Maria Jesus Montero told a news conference on Monday the deficit widened to the equivalent of 10.09% of gross domestic product in 2020 from 2.9% in 2019, vowing to resume the path of deficit reductions this year.

Still, the gap was narrower than the government’s latest official target which stood at 11.3% of GDP.

“The deficit increase doesn’t imply the government has renounced the principle and benefit of budget stability,” she said. “The priority will still be the pandemic, but that will not prevent to reduce the deficit in 2021,” she added.

Last year’s budget gap was the widest since 2012 when the government reported a deficit of 10.7% GDP. (Reporting by Inti Landauro, Emma Pinedo and Anita Kobylinska, Editing by Nathan Allen and Andrei Khalip)

Source: Reuters

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