MADRID, Dec 4 (Reuters) - Spain on Tuesday softened its insistence it would meet its year-end deficit target of 6.3 percent of Gross Domestic Product and said the good performance of its regions in cutting spending was not a guarantee that the objective would be achieved.
At a news conference in Madrid, Treasury Minister Cristobal Montoro declined twice to confirm Spain would meet the European Union-agreed target and instead referred to the European Commission forecast of a budget gap of 7.0 percent of the economic output.
'The formal target remains the same and the European Commissioner for Economic and Monetary Affairs, when he assessed the measures taken by the government said Spain's deficit could be around 7 percent of GDP,' Montoro said.
'What is really important is to reduce the deficit. The quicker the better but without deepening the recession... We shouldn't focus too much on this magic figure of 6.3 (percent of GDP),' he added.
Some analysts fear local finances and higher costs for the social security system could push Spain over its 6.3 percent deficit target.
Spain's government last week said it would not make an end-of-year review to adjust pensions to inflation since its deficit target was the top priority. On Sunday, Spain's Prime Minister Mariano Rajoy said meeting the target would be difficult.
Spain's 17 autonomous regions had a public deficit of 0.93 percent of Gross Domestic Product at the end of September, compared to a year-end target of 1.5 percent of GDP, the treasury ministry also said on Tuesday.
Stripped of extraordinary items, such as early transfers of funds from the central government, the figure came to 1.14 percent of GDP, the ministry said.
'Do these good figures guarantee the 1.5 percent target will be met? No, there is no guarantee. We should not relax,' Montoro said, adding the progress made showed the target was feasible.
The central government has a target of 4.5 percent of GDP, including the cost of funding the social security system.
Its deficit was 4.13 percent of gross domestic product in the January-October period but that does not include the social security system, which is set to register a deficit of 1 percent of GDP according to a document sent to the European Commission in October.
(Reporting by Feliciano Tisera, writing by Julien Toyer; Editing by Sarah Morris, Ron Askew) Keywords: SPAIN REGIONS/
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