The Spanish government has been forced to raise its estimate for last year's budget deficit – less than a month after publishing its initial calculation and hailing an "unprecedented" adjustment in the country's public finances.
Spain’s budget ministry said it made the revision at the request of Eurostat, the European Union statistics agency, to reflect a new method of calculation for tax receipts.
The revision means Spain will fall short of the European Commission’s budget deficit target of 6.4 per cent for 2012 by an even wider margin than anticipated. This miss is unlikely to have immediate consequences, as Brussels has made clear repeatedly that it is satisfied with the Spanish budget effort and that Madrid will have more time to meet its targets.
Some analysts said the revision could be damaging all the same. Mr Conde-Ruiz, deputy director of Fedea, the Madrid-based economics think tank, pointed out that Spain’s budget deficit stood at 9.3 per cent GDP in 2011, and that the reduction last year took place amid a sharp recession.
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