Spain overshot 2015 deficit goal by wide margin

Spain missed its 2015 public deficit target by a wide margin, with its final figure around 5 percent of economic output, Spanish news agency Europa Press reported on Wednesday, citing unnamed government sources. Spain has been under scrutiny for months over its ability to keep its deficit within limits agreed with Brussels, amid warnings from the European Commission that it would likely miss goals set for 2015 and 2016.
The government is due to release the 2015 deficit result on Thursday. Spain's economy ministry declined to comment, while the treasury ministry did not immediately return calls for comment. Though Spanish officials have already suggested the target of 4.2 percent of gross domestic product might be missed, the overshoot could be even larger than the Commission's latest projection that it would come in at 4.8 percent of GDP.
The government was set to announce the deficit stood at around 50 billion euros ($56.74 billion), or around 5 percent of GDP in 2015, Europa Press said. Brussels is also asking Spain - which has yet to form a new government since an inconclusive election on December 20 - to amend its 2016 budget passed by the centre-right People's Party (PP) government last year.
The Commission has warned Spain is likely to miss its 2016 deficit goal of 2.8 percent of GDP without further adjustments, and it has asked for a report back on plans to amend the budget by April. Acting Economy Minister Luis de Guindos said in a recent interview that the government aimed to enforce stricter controls over spending by Spain's autonomous regions to keep the deficit in check.
Spain has dramatically reduced its public deficit after it soared during a financial crisis in 2012. The PP passed unpopular spending cuts in a bid to stick to targets at a time when market jitters over the country's ability to control its accounts nearly pushed it into a sovereign bailout. The economy has since recovered and pressure on Spain has eased, but its deficit is still under scrutiny. It emerged this week that Spain had already warned Brussels two months before the elections that it could miss its 2015 deficit target. A document posted by the treasury ministry on its website, dating from October 15, showed that at that stage it had forecast the deficit would come in at around 4.4 percent of GDP.