Spain may be joining Greece as one of the euro zone's sick men if it misses its budget goal this year as a result of sluggish economic growth, excessive spending and increasing unemployment.

A survey conducted by Focus Economics in September with analysts from 22 international banks and research institutions predicted a budget deficit equivalent to 6.5 per cent of gross domestic product for Spain in 2011.

The Asian Wall Street Journal came out with reports that Prime Minister José Luis Rodriguez Zapatero's Socialist government was lauded in 2010 for its efforts to reduce a budget deficit equal to around 11 per cent of GDP in 2009 to just over 9 per cent in 2010.

Positive developments in the country's labor and retirement fund system also helped bolster confidence of investors.

Unfortunately, this may not be the case for the ruling administration anymore.

Standard & Poor's has already downgraded Spain by one level after economic observers said Spain will probably not meet its target by end of the year.

Spain has made a vow to trim down its deficit to the 3 per cent limit for European Union countries by 2013.

A collapse could raise new doubts about Europe's ability to contain the sovereign debt contagion.

Analysts say huge budget gaps mean debt levels could continue to grow, which, tied with spending cuts could add to the swelling crisis.

The good news for Spain is that many economists believe its government can achieve its year end target of a deficit equal to 4.8 per cent of GDP.

This is because the government has taken steps in recent months to boost revenue, including bringing forward corporate tax payments and temporarily reinstating a wealth tax it did away with in 2008.

"However, the central government may fail to compensate for budget overruns at other levels of government, as it did last year when both regional governments and the social security administration failed to meet their targets," said Angel Laborda, head of analysis at the think tank Funcas.