Just to add to what others have said. At the beginning of the AMEB (Australian Music Examinations Board) Classical Guitar Sight-reading book there is the following suggested sight-reading check list.
Before playing any piece:
- Check the key signature and scan for accidentals
- Tap and count the rhythm. Don't avoid using a metronome
- Locate position changes in the music
- Identify dynamic markings
- Once you have started keep going. The error of a wrong note or rhythm is doubled if you stop and repeat it
As others have said, when first learning to sight-read, use very simple pieces. To give you an indication, the Preliminary pieces in the AMEB sight-reading book are all single notes, mainly crotches, in the key of C and in Simple Duple and Simple Triple time. Think about when we first learn to read a language - we usually start with simple "readers" and "picture books".
For mine, learning to read is a combination of doing small amounts of deliberate sight-reading practice as well as lots of practice learning and mastering studies and pieces. As pointed out above, the Delcamp D01-D03 is a great resource if you are looking for a collection with lots of nice fairly simple pieces.
One last point, Carcassi's Op 60 no 7 isn't really a beginner's piece. In fact it is listed on the Grade 5 AMEB syllabus. If a piece like this is taking a long time to get under the fingers, then it is probably at too high a level (not sure if this is the case for you but just wanted to point it out none the less).