Spain’s Economy Ministry has said in a statement on Monday that the deficit of the central government reached 71.52 billion euro ($103.02 billion) for the first 11 months this year. This is approximately 6.79 percent of the gross domestic product, and is more than five times last year’s figure of 13.96 billion euro.
The reason for this rise in budget deficit is the fall in tax revenues and the ever increasing costs of tackling the economic meltdown, said the government in Madrid on Monday.
While most of the countries of the EU have started to emerge out of the recession, Spain’s recovery is not expected to commence before 2010. The net income this year fell 13.9 percent from last year to 150.75 billion euro and the tax derived income also fell by 13.7 percent to 82.93 billion euro.
The Spanish economy has been under recession for the past five quarters since the construction fuelled boom collapsed late last year and the country now has the highest unemployment (17.9 percent) in the European region. Less than two years ago, Spain was amongst Europe’s best in terms of job-creation.
The Spanish government has pledged that it in 2012, it would bring back the deficit below the 3 percent limit which has been set by the European Union.
The government has financially aided programs directed towards reduction of unemployment, in addition to unemployment benefits, incentives on car purchases and hopes that these combined with other measures will help breathe life into the economy.