Spain’s public debt will reach 90.5 per cent of its gross domestic product in 2013 with its new austerity budget, according to government documents.

Spain also revised its debt ratio forecast for this year to 85.5 per cent of GDP, up from 79.8 per cent.

Finance Minister Cristobal Montoro said on Saturday that Spain’s increased interest costs on its public financing are the main cause of the rise — “it is important to reduce this increase and its speed.”

Mr. Montoro spoke after presenting the 2013 draft budget the government says will cut overall spending by €40 billion ($51 billion). The budget reduces funds available for unemployment payments by 6.3 per cent, and support for Spain’s royal house by 4 per cent.

Spain is mired in its second recession in recent years with one-in-four workers without a job.