Don’t Believe Spain’s Deficit Numbers
March 4, 2013 Leave a comment
Last week, Spanish Prime Minister Mariano Rajoy gave investors and analysts a pleasant surprise, announcing that his country’s budget deficit had fallen to 6.7 percent of gross domestic product in 2012, far below the European Commission’s estimate.
Unfortunately, the lower number is probably wishful thinking on Rajoy’s part, because he excluded the costs associated with recapitalizing Spain’s banks. The European Commission’s estimate was much higher, at 10.2 percent of GDP, because it included them. Read more of this post
Megan Greene is the Chief Economist at Maverick Intelligence, with a particular focus on Europe. She is also a senior fellow at the Atlantic Council, a columnist with Bloomberg and a senior research fellow at Trinity College Dublin. The opinions expressed here are her own and do not reflect those of any employers. Ms Greene offers a strictly independent voice without a political or investment agenda.
