On 13 July, the Spanish Congress approved the largest spending cuts in the country's recent history. The EUR 65 billion austerity package includes a raise in the general VAT rate from 18% to 21%, a reduction in unemployment benefits, salary cuts for public workers and a comprehensive reform of local governments. The plan represents yet another attempt by the Rajoy administration to rein in the excessive deficit and convince investors that Spain can balance its battered public finances and will not require a full bailout. The measures come days after European finance ministers agreed to relax the country's budget deficit targets in exchange for additional fiscal consolidation efforts. Under the agreement, the fiscal deficit target for this year has been lifted to 6.3% of GDP - up from the previous 5.3% of GDP - and to 4.5% of GDP in 2013. European authorities also granted the country an additional year to bring down the fiscal gap to below the 3% of GDP threshold stipulated by the Maastricht criteria, and Spain will now have until 2014 to do so, with a target deficit of 2.8% of GDP set for that year. In addition to the austerity plan, the Spanish parliament also approved the creation of a new instrument, which will have a maximum capacity of EUR 18 billion euros, to help the country's autonomous regions to obtain funding in return for deeper budget cuts. So far, only Valencia has announced that it will tap the bailout fund in order to meet debt payments, although several other regions may follow.
Spain approves massive austerity package
July 17, 2012
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Spain Economic News
October 7, 2016
In August, industrial production expanded 4.0% from the same month last year in working-day adjusted terms.
October 5, 2016
The Markit Purchasing Managers’ Index (PMI) Composite Output Index came in at 54.1 in September, which was slightly below August’s 54.8 reading.
September 30, 2016
Spain’s current account balance incurred a surplus of EUR 3.0 billion in July, which was above the EUR 2.7 billion surplus recorded in the same month of last year and marked the highest reading since December 2014.
September 29, 2016
In August, retail sales rose 4.9% over the same month last year as the discount season drew to an end.
September 29, 2016
In July, the Spanish Board of Architects (Colegio de Arquitectos Técnicos) granted 6,267 new construction permits, according to data published by the Ministry of Public Works (Ministerio de Fomento).