Spain budget deficit at 8.5% of GDP

Spain said today that its budget deficit for 2011 has come in at 8.5% of GDP, even worse than the new conservative government's own already pessimistic prediction.

The increase is likely to ratchet up the pressure on the government to take enact more austerity measures to get the deficit down to the stated goal of 4.4% of GDP for this year, unless it gets some relief from the EU in the form of an easier 2012 target.