MADRID – In July, Spain registered the highest government debt of all time with an amount of €1.49 trillion. The annual debt burden of all government administrations has risen by €70 billion since last year.
This is evident from the most recent debt data for all government services published by the Bank of Spain on Wednesday. It is also an increase of 6.8% compared to pre-pandemic levels, at the end of 2019, where it reached €1.22 trillion.
The increase in July is partly due to the central government, which increased its debt by €11.59 billion compared to June this year. For example, the central administration accounts for almost 88% of the total government debt.
The debt of local governments is also increasing. They have increased their spending by 1.1% since June 2022 to €23.1 billion. That is €634 million more in debt than in July last year.
On the other hand, the Autonomous Communities reduced their debt by 0.7% compared to June and disposed of debt of €314.32 billion, although the value of the debt increased by 1% compared to a year ago, about €3 billion more.
Debt data has been rising for three months in a row. have been linking consecutive increases for three months. Based on GDP data at current prices for the last four quarters published by the National Statistical Institute, the debt-to-GDP ratio is set to come in at 117.7%, above the government’s target. This was set in the stability plan at 115.2% for the whole year.
Another relevant government agency, Social Security, has reduced its debt in this latest report. The institution is indebted to around €99.18 billion. That is €1 million less than in June. However, the annualised interest rate has increased by 8%, which is €7.3 billion more than in July 2021.
Over the past year, public debt has risen by 5%, some €70.81 billion more, as a result of lower revenues and higher spending due to the pandemic crisis and, more recently, the war in Ukraine.
The increase in July is mainly due to the growth of the national debt, which had to make an extra effort due to the crisis, and that of local corporations.
Brussels states that deficits should be below 3% of GDP and public debt below 60% of GDP, but only 14 of the 27 countries of the European Union achieve this.