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Spain's Debt Reaches New High

Spain says its debt has hit a record high, as the country struggles to escape from recession and steep unemployment.

Madrid said Friday that its public debt totaled more than $1.2 trillion in the early months of the year, 88 percent of the country's economic output and sharply higher than a year ago.

Meanwhile, the Standard & Poor's financial services firm left the country's credit rating unchanged at one notch above junk bond status. But S&P gave a negative outlook on the rating, meaning that Spanish bonds could be lowered to junk bond level in the next year or so.

Spain, with the fourth largest economy in the 17-nation euro currency bloc, is predicting its economic fortunes will shrink by 1.5 percent this year before advancing modestly next year.

Prime Minister Mariano Rajoy has led the push for austerity measures to cut the country's debt, but the jobless rate has only worsened. More than a quarter of the country's workers are unemployed.

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