debt | The Corner .eu

Spanish economy 7th September 2023

Moody’s estimates Social Security system’s deficit will increase from 0.5% in 2022 to 1.4% in 2030

Link Securities| The risk rating agency Moody’s estimates that the Spanish Social Security deficit “will increase significantly” over the next two decades in the absence of new adjustment measures as a result of the ageing of the population and higher spending on pensions that involves linking their rise to inflation, which could negatively affect Spain’s credit rating, currently at “Baa1” with a “stable” outlook, according to the newspaper Expansión on…

European economy, In Europe 1st June 2023

ECB warns of risks associated with liquidity in real estate and debt market

Banca March| The European Central Bank (ECB) continues to see “vulnerability” in the markets given the new interest rate scenario, which in its opinion poses higher financing costs for companies and households that could trigger a liquidity crisis, given the need for massive asset sales in a hypothetical panic scenario. This vulnerability would be concentrated above all in real estate funds and in the debt market, this being one of…

In the World, World economy 17th May 2023

General consensus to raise debt ceiling in US Congress: “default is not an option”

Norbolsa | After Tuesday’s meeting, both Biden and congressional leaders were optimistic about a deal to raise the debt ceiling “in the coming days” even though McCarthy insisted that positions are still far apart. For his part, Biden publicly stated that during the negotiations there was a general consensus that “default is not an option” and thus lowered fears of a worst-case scenario.

Market discounts ECB cut in deposit rate

European economy, Markets 10th April 2023

Fixed income: rising nominal yields should push up real yields

Deutsche Bank : The recent credit event in the US banking sector has caused considerable uncertainty about the outlook for policy rates. However, financial authorities have reacted strongly. In addition, the US labour market remains solid and inflation is becoming entrenched. In our view, this continues to justify a “higher for longer” official rate outlook. Although two-year US Treasury yields are falling from their cycle high, they remain, along with…

World economy 9th February 2023

Expectations about role of the State may be frustrated by declining spending and decreasing government effectiveness

Agnieszka Gehringer (Flossbach von Storch Research Institute) | Governments are increasingly being given new tasks to achieve various economic policy objectives. Looking at the major eurozone members, this report shows that high expectations about the role of the state in solving the most pressing problems may be frustrated by declining productivity of public spending and decreasing government effectiveness. Public spending in the four large euro area Member States, Germany, France,…

Spanish economy 21st December 2022

Spain public debt would drop to 110% of GDP in 10 years if structural deficit falls by 0.25% annually, according to Fedea

CdM | La Fundacion de Estudios Economía Aplicada (Fedea) calculates that if all the Public Administrations make an effort on fiscal consolidation which reduces the structural deficit to the tune of 0.25% of annual GDP, this would leave the indebtedness level at 110% of GDP in 2032. For the autonomous communities subsector, and with a similar structural adjustment, Fedea flags that the policy objective of 13% of GDP for the…

Spanish economy 7th December 2022

Foreigners reduce their holdings of Spanish bonds by almost eight points in three years

The share of foreign investors in Kingdom of Spain government securities has decreased from the level of 48.79% at the end of 2019 to 41.04%, which is 7.75 points higher. In December 2019, non-resident investors held a portfolio of Spanish securities for an overall amount of 480.094 billion euros, which represented 48.79% of the total debt issued by the State. They now stand at 499.376 billion euros. The strong effort…

Companies, Ibex, Spanish economy 21st November 2022

Telefónica: a more bullish message on the telco sector than on other occasions

MS | The general feeling is that Telefónica’s message at the TMT 2022 was more bullish than on other occasions. The most important elements: Telefónica is managing the current volatile macro environment well. 2. A generalised hike in prices: the company’s prices are linked to inflation in Brazil, HISPAM and the UK. In Spain, the message has been very direct, speaking about raising prices to levels of inflation as well…

Spanish economy, Spanish Politics 18th November 2022

Who said fear? Sánchez’s government has already raised the debt by 300 billion euros, which marks a new record high: 1.504 trillion (116% of GDP)

Debt set a new all-time high in September, at 1.504 trillion euros, which represents an increase in relative terms of 0.8% compared to the previous month, reaching 116% of GDP. By administrations, government debt rose in September to 1,329,016 billion euros, 6.8% more than a year ago and 1.15% higher than in the previous quarter, marking an all-time high. For their part, the debt of the autonomous communities fell by…

Spanish economy 16th November 2022

Telefónica reassures the hybrid market

Telefónica has placed a new €750mn green hybrid bond with a coupon of 7.125% and a call option exercisable between August and November 2028. At the same time, Telefónica has launched an offer to exchange any and all of the €1.5bn still outstanding on the two hybrids with calls in March and September 2023. Thus, by redeeming all of the outstanding bonds, Telefónica will reduce its outstanding hybrid balance by…