Spain reduced its budget deficit, the second largest in the euro region along with Greece’s, below 7 per cent of gross domestic product in 2012, prime minister Mariano Rajoy said.

“In a time of recession like the one Spain is going through now, I can inform you that Spain’s public deficit was below 7 per cent of GDP last year,” Rajoy said in Madrid yesterday before the annual parliamentary debate on the state of the nation.

Mr Rajoy is seeking to turn a corner after the deepest budget cuts in Spain’s democratic history and a corruption scandal roiled his party. He was spared a full bailout by the European Central Bank’s pledge to backstop euro-region sovereigns last year. The commission’s latest assessment of the Spanish economy is due tomorrow. – (Bloomberg)