MADRID, Oct 9 (Reuters) - Spain will miss its deficittargets in 2012 and 2013 and its debt will jump to more than 90percent of gross domestic product next year as it recapitalisesits banking sector, the IMF said on Tuesday.
The International Monetary Fund said in its fiscal monitorreport that the country's deficit would reach 7 percent of GDPin 2012 and 5.7 percent in 2013, compared with EuropeanUnion-agreed targets of 6.3 percent of GDP this year and 4.5percent of GDP next year.
Spain replaced Greece, Portugal and Ireland as the epicentreof the euro zone debt crisis after it missed its budget targetsby a wide margin in 2011.
The government has pledged to rein in the public financesbut overspending regions and the recapitalisation of a bankingsector crippled by bad debts from a decade-long property bubbleis making the task difficult to achieve in the short run.
Madrid said last week the public deficit would reach 7.4percent in 2012 but that would include one-off elements from therecapitalisation of the banks that the European Commission hasagreed not to take into account when assessing Spain's efforts.
The Commission will publish updated economic forecasts onNovember 7.
Economy Minister Luis de Guindos reiterated on Monday thatSpain would meet the targets and said there was no need foradditional measures despite a deepening economic contraction.
The government has based its budget plan for next year on arecession of 0.5 percent while the IMF forecast a recession of1.3 percent in the country in 2013.
Under current policies, Spain would not return below the EUceiling of 3 pct of GDP until 2017 and its debt-to-DGP ratiowould hit 90.7 pct in 2012 and 96.9 pct in 2013, the IMF alsosaid in the report.
That takes into account a full disbursement of the100-billion-euro European credit line Spain sought in June toprop up its lenders.
Madrid said last month it expected to tap only around 40billion euros. But that would still put the debt at around 84.7pct of GDP in 2012 and 90.9 pct of GDP in 2013.
(Reporting by Julien Toyer. Editing by Jeremy Gaunt.)
Keywords: SPAIN DEFICIT/