The debt of the public administrations as a whole set a historical record in absolute terms in May. It grew to 1.54 billion euros, according to the data published yesterday by the Bank of Spain, which meant an increase of 5.8% in the last year. Surpassing the previous highest record is compatible, however, with an improvement in the ratio of indebtedness in relation to nominal GDP, which falls to the lowest level in recent years.
The State’s debt, forced to maintain strong spending commitments to deal with inflation, remains the highest of all administrations by a wide margin. In May it reached 1.371 trillion, which meant an increase of 7.4% over the last year. The indebtedness of the autonomous communities also grew to 325,000 million, 3.7% more in the last twelve months, while the debt of local corporations increased by 2.6%, up to 24,000 million. For its part, Social Security reached a debt level of 106,000 million, 7% more than a year earlier.
Nadia Calviño’s team chose yesterday to highlight the debt-to-GDP ratio instead of the absolute figure. In this sense, the evolution continues to be positive due to the growth of the economy, highlighted sources from the first vice presidency. Debt stood at 113% of GDP in the first quarter of the year, and central government calculations indicate that the second quarter will close with a debt ratio of 112.4% of GDP, 0.8 points percentages below the 113.2% with which 2022 closed.
This is, however, a figure that is not yet official, waiting for the National Institute of Statistics (INE) to announce next week how much the economy grew in the second quarter of 2023. The estimates of the practical unanimity of organizations and study services lead Economy to show optimism.
“The commitment to fiscal consolidation and the greater growth expected for Spain on the part of the main national and international organizations will allow the reduction of the debt/GDP ratio this year to be greater than expected”, pointed out the Ministry of Economic Affairs.
The Government committed with Brussels in the Stability Program to comply with a deficit of less than 3% by 2024 and to place the public debt ratio below 110% of GDP. “Spain maintains the confidence of the markets and investors, as reflected by the maintenance of the risk premium at around 100 points, and an interest rate on short-term debt similar to that of Germany”, notes Economia.
