Spain expects economy to contract in 2013
Madrid: Spain's government is forecasting an economic contraction of 1.3 percent for 2013 and has set a goal of reducing its budget deficit to 6.3 percent of GDP by year's end, Economy Minister Luis de Guindos said Friday.
Those figures are more pessimistic than earlier projections of a 0.5 percent contraction and a budget deficit equivalent to 4.5 percent of the nation's gross domestic product this year.
In terms of the unemployment rate, the government expects it to climb to 27.1 percent this year.
Those figures were included in the Spanish government's updated plan for complying with the European Union's budget-deficit rules.
The so-called Stability Program was approved Friday at a meeting of Prime Minister Mariano Rajoy's cabinet and will be forwarded on to Brussels.
According to Madrid's projections, the economy will resume a path of growth after this year, inching up 0.5 percent in 2014, 0.9 percent in 2015 and 1.3 percent in 2016.
Spain's budget deficit, meanwhile, is projected to drop steadily as a percentage of gross domestic product: to 5.5 percent of GDP in 2014, 4.1 percent of GDP in 2015 and 2.7 percent of 2016.
In terms of unemployment, the jobless rate is expected to fall to 26.1 percent in 2014 and to 25.8 percent in 2015.