Link Securities | Spain’s public debt increased in 2020 by 122.439 billion euros, which takes this item at 1.311 trillion euros at the end of the fiscal year, according to data from the Bank of Spain.
In terms of Gross Domestic Product, Spanish public debt would have finished last year at 117%, a ratio not reached since 1902 due to the consequences of the Cuban War and the global crisis in agricultural prices.
The sharp increase in Spanish public debt is largely a result of the crisis caused by the pandemic, which has forced most Eurozone countries to rise public spending at a strong pace while tax revenues plummeted, with the associated growth in deficits and public debt in all of them. However, in the case of Spain this is twice as worrying, since in recent years both figures, deficit and public debt, had already been climbing strongly, which has left the country with less fiscal room for manoeuvre.
Public debt will be a major burden for the growth of the Spanish economy in the coming years unless the strong imbalances that the economy has been dragging along for almost three decades are corrected once and for all. We are not optimistic about this.
Nevertheless, public debt seems to have stabilized in the final part of 2020. Specifically, the government debt fell by 1.59 billion euros in December, down 0.13% compared to November.