For the second consecutive year, the Treasury has reduced its debt issuance forecast for the year as a whole in the last quarter of the year. If in 2022 it did it from 75,000 million to 70,000 million, now it has just done it from 70,000 million to 65,000 million. Its exposure to the markets will now be somewhat lower in a year of strong interest rate increases.
According to the Treasury itself, it has already completed 85% of the net emissions planned for this year. In gross terms, its forecast at the beginning of 2023 was to issue 256,846 million euros, 10% more than a year before, often to extend existing obligations.
The Ministry of Economic Affairs indicates that the “dynamism and greater growth of the Spanish economy” have allowed the planned emissions to be reduced. Its commitment is to reduce both the debt-to-GDP ratio and the public deficit, after several years of growth, especially as a consequence of the pandemic.
If at the beginning of the year the Treasury estimated the average life of Spanish debt at 7.9 years, it now places it at nearly 8 years. The Minister of Economic Affairs, Nadia Calviño, has indicated from Luxembourg that this year refinancing needs have been reduced.
The increases in interest rates up to 4.5% have affected issues, carried out in some cases at interest rates close to 4%. This pressure has raised the cost of all Spanish public debt, which has become more expensive by 33 basis points and has gone from 1.73% to 2.06%.
The public deficit will be 3.9% of GDP this year and the forecast is for it to drop to 3% in 2024. The Government expects the debt-to-GDP ratio to be reduced from 108.1% in 2023 to 106.3 % in 2024.
