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Spain will miss its deficit targets in 2012 and 2013 and its debt will jump to more than 90 percent of gross domestic product next year as it recapitalizes its banking sector, the IMF said on Tuesday.

The International Monetary Fund said in its fiscal monitor report that the country's deficit would reach 7 percent of GDP in 2012 and 5.7 percent in 2013, compared with European Union-agreed targets of 6.3 percent of GDP this year and 4.5 percent of GDP next year.

Spain replaced Greece, Portugal and Ireland as the epicenter of the euro zone debt crisis after it missed its budget targets by a wide margin in 2011.

The government has pledged to rein in the public finances but overspending regions and the recapitalisation of a banking sector crippled by bad debts from a decade-long property bubble is making the task difficult to achieve in the short run.

Madrid said last week the public deficit would reach 7.4 percent in 2012 but that would include one-off elements from the recapitalisation of the banks that the European Commission has agreed not to take into account when assessing Spain's efforts.

The Commission will publish updated economic forecasts on November 7.

Economy Minister Luis de Guindos reiterated on Monday that Spain would meet the targets and said there was no need for additional measures despite a deepening economic contraction.

The government has based its budget plan for next year on a recession of 0.5 percent while the IMF forecast a recession of 1.3 percent in the country in 2013.

Under current policies, Spain would not return below the EU ceiling of 3 pct of GDP until 2017 and its debt-to-DGP ratio would hit 90.7 pct in 2012 and 96.9 pct in 2013, the IMF also said in the report.

That takes into account a full disbursement of the 100-billion-euro European credit line Spain sought in June to prop up its lenders.

Madrid said last month it expected to tap only around 40 billion euros. But that would still put the debt at around 84.7 pct of GDP in 2012 and 90.9 pct of GDP in 2013.