Spain hopes to cut the deficit to 6.3 percent of annual GDP this year

Spain hopes to bring its swollen deficit below the 3 percent EU limit by the end of 2016, two years later than promised.

The move is an admission that austerity measures so far have not been as effective as hoped, and that rushing more budget cuts could excessively harm the economy.

The Economy Ministry said in a statement Friday that Spain hopes to cut the deficit to 6.3 percent of annual GDP this year, 5.5 percent in 2014, 4.1 percent in 2015 and 2.7 percent in 2016.

The forecasts are part of a reforms program to be presented to European Union authorities.

The government forecasts the economy will contract 1.3 percent in 2013, instead of 0.5 percent as originally predicted. It says it will grow 0.5 percent in 2014.