2010.07.2823:04:00UTC+00Spanish Government Deficit Shrinks By A Quarter

The Spanish central government's budget shortfall for the first six months of the year shrank by 24.7% compared to the same period a year ago, official figures showed on Wednesday.

The central government deficit stood at EUR 29.77 billion, which is equivalent to 2.8% of the country's one-year national output. A year ago, the deficit-to-GDP ratio stood at 3.8%.

The government said the fall in the deficit came due to rising tax revenues, up 10.6%. Income tax revenue climbed 3.6% and VAT revenue was up 31.3%.

The central government balance does not represent the entire public sector balance sheet however, as it excludes the social security system and also the balance sheets of the various regional governments.

The Spanish government has approved numerous budget cuts aimed at bringing down the country's large budget deficit. The country currently had a deficit of 11.2% of GDP last year, which it has pledged to bring under 3% by 2013.

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