The Spanish economy, deep in recession and with unemployment at a record high, should return to very modest growth next year and post a balanced budget by 2016, the government said yesterday.

“For 2013, we are projecting slight growth” of 0.2 per cent, Economy Minister Luis de Guindos said, with the government having forecast a contraction of 1.7 per cent for this year.

Mr De Guindos said the economy should then pick up to post growth of 1.4 per cent in 2014 and then 1.8 per cent in 2015.

Spain posted a public deficit – the shortfall in revenues to spending – equal to 8.5 per cent of Gross Domestic Product last year, way above the six per cent target and the EU ceiling of three per cent.

After a series of biting and hugely unpopular austerity measures, the government aims to get the deficit down to 5.3 per cent this year and three per cent in 2013. Mr De Guindos said the deficit would fall further to 2.2 per cent in 2014, 1.1 per cent in 2015 and finally to be in balance by 2016.

The government expects unemployment to ease to 24.2 per cent next year while data yesterday showed the jobless rate jumping sharply to 24.4 per cent in the first quarter of 2012 from 22.85 per cent in the previous three months. The jobless report adds to the pressure on the government to meet its targets and avoid having to seek an international debt bailout like its eurozone peers Greece, Ireland and Portugal.

Government spokesman Soraya Saenz said yesterday that the country was “perhaps going through one of its most difficult periods on the economy”.

“We are aware that this is a difficult time but if we all work together, we will get out of the crisis,” Ms Saenz said.