By Judith Ugwumadu | 1 October 2013

Spanish ministers have approved a budget for 2014, which will continue the programme of austerity cutting departmental budgets by almost 5%.

But the government said the country’s economy was on the road to recovery, predicting growth of 0.7% next year and a fall in the unemployment rate.

Speaking on September 27, Cristóbal Montoro, minister for the Treasury and Public Administration Services, said: ‘This is a budget designed for economic recovery, but which continues to contain characteristics that are unavoidable in seeking to achieve this recovery: it is rigorous, austere and committed to the reduction of the public deficit.’

He added, however, that the budget displayed a ‘marked social nature’, allowing for grant increases for culture, housing, and research and development.

Montoro also confirmed that the official public deficit figure for 2012 had fallen to 6.84% from 7%. ‘This shows that those who have the responsibility to run the country are doing so in a balanced manner,’ he said.

Spain’s local authorities were also praised for improving their figures.

Soraya Sáenz de Santamaría, vice president of the government, said: ‘These are responsible and realistic budgets that seek a balance between the necessary austerity, cost containment – particularly expenditure by the public administration services – whilst driving recovery as the basis for sustained growth.’

Luis de Guindos, minister for economic affairs and competition, added that the slowdown was over and Spain was now out of recession.

‘The government forecasts that in the second half of the year we will witness slightly positive quarter-on-quarter growth,’ he said.

The 2014 budget has been presented to Spain’s lower house of Parliament for consideration.