Spain Deficit Pain Bites Consumers as Rajoy Steps Up Cuts
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Spanish Prime Minister Mariano Rajoy’s austerity drive will intensify this week as a sales-tax increase tightens the squeeze on consumers whose spending is already plummeting.
The move to raise the value-added tax on Sept. 1 will follow a flurry of data showing pressure building on household finances in the euro area’s fourth-biggest economy, home to a third of its unemployed. A report today showed mortgages fell 25.2 percent from a year ago in June after a 30.5 percent drop in May. Meanwhile, the Health Ministry today said spending on prescription drugs fell 23.9 percent from a year ago in July, the steepest drop since the series started in 1999, after the government last month increased the share patients pay for pharmaceuticals.