Spain is poised to lower the shortfall to 9.3 percent of GDP this year. An EU-led rescue of Ireland and Portugal would leave Spain with less margin for error, said Juan Jose Figares, chief analyst at Link Securities in Madrid.
“If both Portugal and Ireland are bailed out, all eyes will be on Spain and any deviation to their commitments would be a threat,” Figares said.
Austerity measures are choking economic growth, threatening to damp revenue increases the government is counting on to meet its deficit target. The economy stalled in the third quarter as household spending contracted, a government report showed today.
Household spending shrank 1.1 percent from the previous three months, when it expanded 1.5 percent, the National Statistics Institute in Madrid said today.
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