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Bank of Spain calls for backup plan on economy

Bank of Spain calls for backup plan on economy

The Bank of Spain is urging the government to develop a backup plan in case the economy fails to grow enough to meet deficit-reduction goals.
Bank governor Miguel Angel Fernandez Ordonez says many economists think the government's forecast of economic growth of 1.3 percent in 2011 is too optimistic and predict growth will in fact be 0.6 percent.
He told a parliamentary panel Tuesday the government should have alternative measures ready, such as cutting spending by regional and local governments.
Finance Minister Elena Salgado presented a draft 2011 budget to Parliament last week and said the government is confident in its forecasts and has no Plan B.
The budget foresees cutting the deficit from an expected 9.3 percent of GDP this year to 6.0 percent in 2011.