As the eurozone's fourth-largest economy slowly recovers from five years of stop-start recession, Madrid raised its official growth targets to 1.2 percent this year from 0.7 percent previously and to 1.8 percent in 2015 from 1.2 percent.
At the same time, Prime Minister Mariano Rajoy's government said it expected the unemployment rate to fall to 24.9 percent in 2014 and 23.3 percent in 2015.
Spain's jobless rate, recorded at nearly 26 percent in the first quarter of this year, was not expected to fall below 20 percent until 2017.
The government has, however promised 600,000 new jobs in 2015 and 2015 .
Despite struggling to meet past targets to cut its public deficit, the government said it now expected to trim the shortfall to the equivalent of 5.5 percent of economic output in 2014 compared to a previous target of 5.8 percent.
Spain has seen 1.2 million jobs disappear since the current Popular Party government came into power, Spain's El País newspaper reported on Wednesday.