2010.08.3110:24:00UTC+00Spain's Budget Deficit Falls 48% In Jan-July

Spain's budget deficit narrowed 48% year-on-year in the first seven months of the year after the government's austerity measures started working.

According to a statement released by the Economy Ministry, the deficit totaled EUR 25.77 billion, or 2.44% of the country's gross domestic product. A year ago, the deficit was EUR 49.8 billion or 4.73% of GDP in the same period.

The Spanish economy maintained a weak recovery in the second quarter by growing 0.2% following a 0.1% rise in the March quarter, exiting recession. However, economists are of the view that the outlook for the southern European country is grim.

The country's Prime Minister Jose Luis Rodriguez Zapatero announced steep budget cuts aimed at bringing down the country's large budget deficit, after pressure from the European Union. Measures include public sector wage cuts and smaller budget allocations for regional governments. Spain has pledged to bring the shortfall under 3% by 2013.

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