Spain central bank governor says deficit targets at risk

Spain's central bank Governor Luis Maria Linde said on Thursday the government's 2013 budget forecasts for the economy and tax income were optimistic and that deficit reduction targets may be missed.

Speaking in parliament the Bank of Spain head said the economy would contract by around 1.5 percent next year, in line with estimations by outside organizations.

The government budget is based on a forecast of a 0.5 percent contraction, which he said was "certainly optimistic."

He also cited a downside risk to government forecasts for tax revenues next year.

(Reporting by Carlos Ruano; writing by Nigel Davies; Editing by Fiona Ortiz)