FORECASTS from the Bank of Spain show the country may continue to miss its EU deficit targets for the next three years at least – having already narrowly escaped a €2 billion fine from Brussels for failing to contain its debt in 2016.
Spain's target for 2016 was for its national debt not to go above 4.6% of the GDP, although by 'judgment day' this autumn, it remained at nearly 5%.
According to the country's central bank, the deficit will sit at 4.4% at the close of this year, below the EU target, but that it will still be above the figure agreed with Brussels at the end of 2017.
Within the next year, Spain has pledged to bring its debt down to a maximum of 3.1% of the GDP, but the Bank of Spain predicts it will not get below 3.6%.
For 2018 and 2019, Brussels has instructed Spain to reduce its State deficit to 2.2% and 1.3% respectively.
Again, the Bank of Spain believes it will fail in its mission, with a forecast debt-GDP of 3.2% for 2018 and 2.8% for the following year.
To meet its target, the Spanish government needs to claw back over €7bn more in 2017 than in 2016, which it plans to do by clamping down on tax evasion among ultra-high net-worth individuals and companies, and increasing corporation tax.
Economy minister Luis de Guindos calculates these measures will bring in over €8bn, putting the debt cap comfortably within reach.
The Bank of Spain says next year's fiscal policy will be 'contracting' rather than 'neutral' as the European Central Bank (BCE) predicted, and warns that this could leave to 'less-dynamic activity', or a slight shrinkage in the economy, in the short-term future.
Read more at thinkSPAIN.com