The Bank of Spain (BdE) confirmed this Wednesday that the debt of all public administrations continued to rise last year until it stood at 1,574 billion euros at the end of the year, close to the historical maximum it set in the third quarter. However, the fact that the economy advanced more than expected (2.5%) despite the context of high rates, slowdown in the Eurozone and geopolitical tensions, allowed debt to be reduced in relative terms, placing the ratio above GDP at 107.7%, four points below how it closed the previous year.
In a single year the volume of debt has increased by 70,955 million euros due to the deployment of measures that the State has had to approve to face the energy and inflation crisis and the consequences of the Russian invasion of Ukraine on companies and the families. At the same time, this 107.7% improvement on the Government’s commitment and represents a notable decrease from the 111.2% debt that Spain registered at the beginning of the year.
At the same time, it leaves Spain in a somewhat better position given the return of the deficit and debt limits at the European level, which have been in force again since last January. In May, the new fiscal rules will begin to be applied, which must be received before the approval of the European Parliament, and Brussels has already demanded that Spain make a greater effort to contain this imbalance, which represents a “high risk” in the medium term due to the aging of the population and the increase in pension spending.
By subsectors, the debt of the Central Administration rose by 5.5% year-on-year and now reaches 1,434 billion euros, while the State is the one that has assumed most of the cost of what is known as the ‘social shield’. This volume of liabilities represents 98.1% of GDP.
In the case of the debt of the Social Security Administrations, it rose 9.4% in the last year to 116,000 million (equivalent to 7.9% of GDP) after the Central Executive again linked the revaluation of pensions to the average increase in inflation in the previous year.
Regarding the territories, the entity has also confirmed that the debt of the autonomous communities as a whole rose by 2.6% year-on-year to reach 325,000 million euros at the end of the year, an amount that represents around 22. 2% of the economy. Meanwhile, the debt of local entities increased by 1.2% to 23,000 million euros, around 1.6% of GDP.
Valencian Community, Murcia and Catalonia, the most indebted
In the middle of the debate on the Central Government’s proposal to forgive the autonomies a part of their debt – which is part of the investiture pact signed by the PSOE and ERC – the information published by the BdE confirms that the Valencian Community remains the more indebted in relative terms, given that its liabilities reach 42.2% of its GDP. This after having reduced it by just over one point in relation to the fourth quarter of the previous year.
They are followed by the Region of Murcia, which has reduced its debt by just six tenths to 31.1% of its GDP; as well as Catalonia, with a debt level that represents around 31% of its economy, that is, two points less than at the end of 2022. On the opposite side is Navarra, with a debt-to-GDP ratio of 12% ( has lowered it by 1.4 points), the Canary Islands (12.2% debt) and the Community of Madrid (12.6%).
At the local level, the entity led by Pablo Hernández de Cos has also released the data of the town councils with more than 300,000 inhabitants. Madrid took the lead after increasing its debt by 12.8% to 1,960 million. Behind were Barcelona, which shot up its debt by 19.3% to 1,333 million; as well as Zaragoza, with 4.1% more and liabilities that reach 603 million, Murcia (269 million and an increase of 7.6%) and Seville (239 million after increasing its debt by 10.6% year-on-year).
By instruments, at the end of the fourth quarter, most of the Spanish debt was in debt securities (1,397 billion) and mainly at longer terms (1,326 billion). In short-term values it totaled 71,665 million euros. The Treasury has made an effort to raise the average life of debt to protect itself from rising financing costs in the face of rising interest rates. The rest of the debt was distributed in loans (170,748 million) and in cash and deposits (5,286 million).
