MADRID Oct 6 Spain's budget watchdog said on
Thursday the country was likely to meet its public deficit
target of 4.6 percent of national output for 2016, a goal that
has been increasingly in doubt at a time of political paralysis.
Spain overshot its target by a wide margin in 2015, and the
European Commission relaxed its deficit goals to give the
country until 2018 to get the budget gap below 3 percent of
output instead of by this year.
But a drop-off in tax revenues and weak social security
contributions have led several analysts to warn that even this
year's goal might not be reached, in spite of a robust economic
recovery. The Bank of Spain said last week the deficit could
come in at 4.9 percent.
Spain has also been without a proper government since
December last year, when the first of two inconclusive national
elections delivered a hung parliament, hampering any plans for
lasting reforms to fix the situation.
The caretaker conservative government last Friday passed
temporary measures forcing companies to pay more tax up front.
Airef, Spain's budget supervisor, said in a report on
Thursday that as a result corporate tax income was likely to
rise again in the second half of the year, helping put the
overall deficit target within reach.
"Airef believes it is probable the 2016 deficit for all
public administrations will reach 4.6 percent," it said.
It did not comment on 2017's budget goal. Spain has been
unable to draw up a new budget for next year due to the
political limbo, forcing it to roll over the one for 2016.
(Reporting by Sarah White; Editing by Louise Ireland)