Spain has seen a remarkable fiscal consolidation in the past few years, reflecting tight expenditure control, coupled with declining interest payments, and strong revenues. The 2004 general government balance showed a deficit of 0.3% of GDP, but this included one-off expenditures amounting to 0.7%, and the budget is expected to return to a broadly balanced position or to small surpluses from 2005 onward. In parallel, the debt-to-GDP ratio is projected to continue to decline rapidly to about 41% of GDP by 2008 from 48.9% in 2004. These figures compare with the 'AAA' median deficit- and debt-to-GDP ratios of 0.65% and 46.0%, respectively, in 2005. Reforms to labor and product markets have increased the resilience of the Spanish economy in the
