The Spanish public budget

This is the third paper in a series on the Spanish economy. The first paper is The Spanish recession and the second is The Spanish banks . Spain is in recession. Unemployment has surged and as a result the economy’s automatic stabilisers have negatively affected the public deficit, with tax receipts down and benefit payments up. In addition Spain has launched a hefty discretionary fiscal easing of 3.0% of GDP in 2008 and 2.0% in 2009. We expect the fiscal easing together with the automatic