Moody’s, in its report “Spain: the fiscal outlook remains challenging despite relaxation of the deficit target,” released today in London, believes that fiscal consolidation this year will be slower than expected by the Government.
The U.S. agency believes that, although the deficit target for this year is “more realistic” than the 4.4 percent of initial GDP, the Executive headed by Mariano Rajoy will have to “other substantial adjustments.”
“Several measures to be taken have been identified but will not be sufficient” to achieve the 5.3 percent deficit of gross domestic product (GDP) by 2012, says Moody’s report.
The agency believes that the main obstacle to achieve the deficit are the regions and that failure to take “deep structural measures” will not be possible to reach the three percent deficit agreed with the European Commission for 2013.
Moody’s praised recent government measures to provide liquidity to regional finances, but are considered inadequate because they do not rush the “rationale” for the accumulation of commercial debt, the league the growing health care costs and access problems to the funding.
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