Spanish Public Debt At An All-Time High: 122% Of GDP

Nadia proud spainSpanish former Minister of Economic Affairs Nadia Calviño

The debt of general government as a whole reached 1.42 trillion euros in June, a new all-time high, after growing by almost 1.7% in monthly terms. It is the second consecutive month in which it has risen according to data published on Tuesday by the Bank of Spain.

Using nominal GDP for the last four quarters, the debt-to-GDP ratio stood at 122.1% in the second quarter of 2021, above the target of 119.5% of GDP set in the Stability Plan.

Compared to June last year, public debt has increased by 134,607 million euros, a rise of 10.4%, as a result of the Covid-19 crisis, which has cut revenues and increased expenditure to finance the approved support measures.

This new rise in debt in June is due to the increase in the indebtedness of all public administrations. Specifically, the debt of the State, which has had to assume an extra spending effort due to the impact of the coronavirus crisis, stood at 1.23 trillion euros in June, 19,632 million more than in May (+1.6%), while in year-on-year terms it rose by 7%.

For their part, the autonomous communities increased their debt in June by 1.1% with respect to the previous month, to 312,929 million euros, 2.4% more than in June 2020.

Local corporations also increased their debt in June, by 0.2% with respect to May, to 22,689 million euros. However, this figure is 9.3% lower than in June 2020, according to Europa Press.

Finally, the debt of the Social Security administrations rose by 7.6% in June compared with the previous month, to a maximum of 91,855 million euros.

In year-on-year terms, i.e. with respect to June 2020, Social Security debt has shot up by 33.4% due to the loans granted by the State to finance its budget deficit.

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