The Spanish government has insisted there would be no complete overhaul of its economic policy despite the nation being unable to meet earlier deficit targets. It said the country would return to growth next year.
Spain's conservative government of Prime Minister Mariano Rajoy on Friday confirmed the adoption of a revised economic program for the crisis-stricken southern eurozone country.
Deputy Prime Minister Soraya Saenz de Santamaria told reporters there was no need for any major new reforms, tax hikes and spending cuts to meet revised growth targets, indicating that too much austerity would be counter-productive in the nation's recovery process.
Madrid conceded Spain would miss the original budget deficit target agreed with the European Union earlier. It said the shortfall stood at nearly 7 percent of GDP in 2012 and would only be brought down below the bloc's limit of 3 percent by 2016 instead of 2014.
The government expected gross domestic product to shrink by 1.3 percent throughout this year, thus drastically revising earlier forecasts of just 0.5 percent in negative growth. But it hastened to add that next year Spain would finally be able to leave recession behind and log a 0.5-percent expansion of GDP.
The situation on the labor market continued to look gloomy. Madrid said it currently had an unemployment rate of over 27 percent, leaving 6.2 million people out of work. Youth joblessness was put at 57 percent. The government said it feared the overall unemployment rate would not drop below the 26-percent mark before 2015.
hg/hc (dpa, Reuters, AP)