Spain's state deficit narrows

Spain's state deficit narrowed from a year earlier in the first nine months of the year, according to official figures announced Thursday. The country's nine-month central government deficit decreased by 16.8 percent to 37.016 billion euros (51.963 billion U.S. dollars), or 3.42 percent of its GDP, down from 4.23 percent a year earlier, the Treasury Secretary Juan Manuel Lopez Carbajo announced. The news came amid a reduction of 75.522 billion euros (106.017 billion dollars), or a 16.7 percent drop in state income, which is more than offset by a 112.538 billion-euro (157.981 billion dollars) reduction in expenditure. "There is no doubt that for another month, the reduction of the deficit is following the correct line in accordance with our predictions," said Lopez Carbajo. Direct taxes stood at 63.939 billion euros (89.758 billion dollars), while indirect taxes brought in earning of 54.854 billion euros (77.004 billion dollars) to the state, he said. But the positive effect of VAT's rise from 16 to 18 percent in July 2010 was beginning to become diluted, he added. "The process of the fiscal consolidation of the state is continuing its course, we have fulfilled the objective we have set. The important thing now is to continue with the efforts, not just for the state, but also for the rest of the administrations," said Lopez Carbajo, referring to the debts of Spain's autonomous communities. Risk assessment agencies Standard & Poor's and Fitch recently downgraded the debts of several regions in the country, such as Catalonia, Aragon and the Community of Madrid. "We hope that for the good of all of us, we are able to fulfill our aims and if any region sees things go better than expected, that is all for the good," concluded Lopez Carbajo.