Spain 2014 public debt to hit 99.8%

File photo shows public workers protesting against government cuts in Madrid, Spain.

Spain™s Treasury has forecasted that the public debt is to hit 99.8 percent of the country™s gross domestic product (GDP) by the end of next year, according to details of its 2014 budget.

The department presented the budget on Monday and added that the debt-to-GDP would reach 94.2 percent at the end of 2013. Last year™s public debt was 85.9 percent.

The Treasury also announced that it plans to issue 243.0 billion euros (USD 330 billion) of gross debt next year to cover maturing debts and new financing needs.

The predictions came just days after Prime Minister Mariano Rajoy™s government approved further unpopular austerity measures in the 2014 budget.

One of the measures involves keeping a freeze on pensions and public sector workers™ salaries for a fourth year. Rajoy had promised in his successful 2011 election campaign to protect retirement pension.

Critics have blasted the proposed measures, saying the pension reform would mean a loss of spending power for retirees and that the pay freeze would likewise punish the country™s civil servants.

One of Spain™s biggest labor unions, the UGT, has also criticized the budget saying in a statement that œdodges the problem of unemployment and consolidates the cuts.”

Spain is in the grip of a double dip recession, with the government of Prime Minister Mariano Rajoy predicting a 1.3-percent economic decline this year.

The country™s unemployment rate is 26.3 percent, the second-highest level in the eurozone. Among those aged 16 to 24 the rate stands at 56.1 percent.

Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, taking millions of jobs with it.

Spain must lower its deficit to 4.5 percent in 2013 and 2.8 percent in 2014. Many economists, however, say those targets will be difficult to meet amid poor prospects for Spain™s economic recovery.

The Spanish government has also been sharply criticized over its austerity measures that are hitting the middle and working classes the hardest.


Copyright: Press TV