Capital flight from Spain reached a whopping 296 billion euros or 27 percent of the country’s GDP from June 2011 to June 2012, the IMF said on Wednesday.

Investors fear the eurozone sovereign debt crisis may escalate and are withdrawing funds from recession-hit peripheral countries, despite the Spanish government’s efforts to cut the budget deficit and carry out structural reforms.

The IMF predicts Spain’s budget deficit will reach 5.7 percent of the country’s GDP next year, above the planned level of 4.5 percent.

The IMF also estimates Spanish GDP will fall by 1.3 percent next year. Spanish economists are more pessimistic and think GDP could plunge 3.2 percent in 2013.