Spain more than doubled its estimate of contraction in the economy this year to 3.6 percent from 1.6 percent forecast previously, in an estimate on Friday.
Speaking after a cabinet meeting, Economy Minister Elena Salgado also said that the government expected the economy to shrink by 0.3 percent next year, recovering to growth of 1.8 percent in 2011 and 2.7 percent in 2012.
She forecast the country's public deficit, which comprises the central government budget, social welfare budgets and local authority finances, would equal 7.9 percent of gross domestic product in 2010 and 5.2 percent in 2011.
These figures are well above the limit of three percent set by European Union rules.
She said that the unemployment rate, which has shot up since the beginning of the economic crisis, would remain high for several years, at 17.9 percent this year, 18.9 percent next year, 18.4 percent in 2011 and 17.1 percent in 2012.