According to the Financial Accounts of the Spanish economy for the second quarter released by the Bank of Spain, company and household debt fell in this period to 155.7% of GDP, more tan eight points below the level of the previous year.
The ratio of company debt in Q2 was 94.9% of GDP, and that of families 60.8%. In the case of company debt, the rate falls to 76.3% if inter-company loans are excluded. In both cases, the levels are already close to the European average.
In the last four quarters the net financial operations of the resident sectors (households, companies, financial institutions and public administrations) have registered a surplus of 21 billion euros, equivalent to 1.8% of GDP. In 2017 the positive balance was above 2.1% of GDP.
The elevated level of foreign debt is a significant vulnerability of the the Spanish economy. In the last year until the second quarter companies, households and financial institutions have carried through adjustments to have a financing surplus of 4.4% of GDP. More than half has been carried out by financial institutions, making the sanitising of their balances compatible with necessary financing in the best of posible conditions for the other economic agents, which explains the strong growth in the Spanish economy. The financing deficit of public administrations in the same period was 2.7% of GDP.
