MADRID Dec 11 Ratings agency Fitch said on
Tuesday that Spain's 17 autonomous regions were set to achieve
their joint deficit target for this year, but cautioned the
outcome was not guaranteed.
Spain's regions are at the heart of the country's economic
crisis, with investors concerned whether Madrid can bring the
overspending territories to heel.
The regions, which missed deficit targets in 2011, reported
a joint deficit for the third quarter equivalent to 0.93 percent
of gross domestic product, Fitch said, meaning they are on track
for the year-end target of 1.5 percent of GDP.
"Spanish regions are implementing sharp reductions in
operating expenditure and capital expenditure, which is
positive, even if not all of them will hit their deficit
targets," Fitch said in a statement.
Spain's autonomous regions manage their individual
healthcare and education spending. Their joint deficit stood at
9.8 billion euros ($12.7 billion) for the first nine months of
the year, compared to 23.4 billion euros at the same time in
Capital expenditure tumbled 26 percent year-on-year to 7.6
billion euros as local governments put big projects on hold to
meet targets, while revenues increased 2.3 percent.
Fitch said the increase in revenues was under threat from
Spain's shrinking economy and also warned that the final reading
for the first nine months of 2012 could change because of
Spain's Treasury said on Tuesday it would not use the state
lottery to raise cash for a regional liquidity fund set up
earlier this year to support the autonomous territories after
total payouts for this year came in around a third less than
expected at 12.6 billion euros.
Nine regions have tapped the fund so far. Fitch said the
Navarra and Murcia regions had already exceeded the 1.5 percent
deficit target and meeting the goal will be "challenging" for
Catalonia, Andalusia and Extremadura.