2023-07-18 11:51:44
Public debt continues its spiral of monthly records. The liabilities of the public administrations as a whole reached 1,541 trillion euros in May, a new historical maximum, after growing more than 1% in the monthly rate, after the decrease registered in April, according to data published this Tuesday by the Bank of Spain. In the last year alone, public debt has grown by 5.8%, with 85,176 million euros more, as a result of lower income and higher expenses derived from the pandemic crisis and the war in Ukraine as well as the rise in prices.
The monthly rise in debt in May is mainly due to the increase in State liabilities and, to a lesser extent, that of the autonomous communities and town halls, while the Social Security debt has remained more or less stable in the fifth month of the year. Specifically, in May the State debt stood at 1,371 trillion euros, also a historical record, which represents an increase of 1% and 14,840 million euros more in just one month, while in the last twelve months it has increased by 7.4%.
Communities and municipalities
The autonomous communities also increased their debt in May compared to the previous month, up to 325,407 million euros, some 3,894 million euros more (1.2%), while the interannual rate experienced a rebound of 3.7%.
Regarding Social Security, its debt has remained stable in May, with 106,169 million euros, one million less than in April. However, in the last 12 months it has rebounded by 7%, with which it remains at a maximum. The Bank of Spain explains that the increase in Social Security indebtedness in the last year is due to the loans granted by the State to the General Treasury of the organization to finance its budgetary imbalance.
The city councils have registered a debt in May of 23,573 million euros, 0.7% more than the previous month, while in the last year it has rebounded by 2.6%.
Fiscal consolidation
Despite the new increase in absolute terms registered in May, the public debt ratio remains around 113% of GDP due to the growth experienced by the Spanish economy in recent quarters. In fact, the Ministry of Economic Affairs has highlighted that the provisional data on public debt confirms that the ratio to GDP has continued to moderate in May, in line with recent months. “The commitment to fiscal consolidation and the higher growth forecast for Spain by the main national and international organizations will allow the reduction in the debt/GDP ratio this year to be greater than expected,” they say from the Department headed by Nadia Calviño .
The Government, despite the bulky volume represented by the 1.54 trillion public debt that Spain accumulates in an environment of higher interest rates, thus defends that the country has “easily” met the fiscal targets set for three consecutive years and In the Stability Program, the reduction of the public deficit to 3% and the public debt ratio below 110% of GDP are brought forward to 2024, forecasts endorsed by the European Commission. Already in 2022, a record debt reduction of 5 percentage points was achieved in one year, highlights Economía. From the maximum reached at 120.4% of GDP at the end of 2020, public debt has fallen to 118.3% in 2021, to 113.2% in 2022 and to 112.8% in the first quarter of 2023, although in volume, it has not stopped rising.
The Executive has also highlighted that Spain maintains the confidence of the markets and investors, as reflected in the maintenance of the risk premium around 100 basis points, and an interest rate on short-term debt similar to the from Germany.
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