The Ministry of Economic Affairs and Digital Transformation has reported the new data on the debt of the Public Treasury. In addition, they have ensured that it has already covered 73% of all medium- and long-term financing planned for 2023, and has also maintained the cost of public debt at 2%. This coverage rate, updated on August 16, has been framed in a 2023 marked by the tightening of financing conditions in view of the progressive rise in interest rates being carried out by the European Central Bank.
The Treasury’s Annual Report notes that public debt was reduced to 113.2% of GDP during 2022, allowing it to maintain “solid” access to capital markets and “strong” demand from investors.
5,000 million less issuance
The financing coverage and cost of debt data have been released on the occasion of the presentation to the Council of Ministers of the Annual Report on Public Debt Policy. The first vice president and acting Minister of Economic Affairs and Digital Transformation, Nadia Calviño, has been in charge of presenting the document.
The text notes that net debt issuance fell by 5,000 million during 2022, standing at 70,063 million euros. In gross terms, the issuance stood at 232,570 million. Among other points, the Government highlights the reduction in debt issues in a context of “good behavior” of the economy, an improvement in public revenue and “prudence” in the estimates of the financing program at the beginning of the year.
The debt stood at 11.3% of GDP in 2022
Another note that leaves the memory is that in 2022 the debt/GDP ratio was reduced by five points, to 113.2%, which is two points less than the forecasts included in the budgets for that year.
The Ministry underlines that in 2022 the Treasury maintained a “solid” access to the market, with a demand “much higher” than the amount issued and a high participation of non-resident investors, which remained stable at around 40%. The four syndications of State Obligations contained in 2022 arouse special interest among international investors (more than 80% of the volume awarded).
Asuntos Económicos highlights that, on the other hand, the main rating agencies maintained Spain’s credit rating during 2022, as happened in 2021 and in the stability of the risk premium at levels similar to the pre-pandemic period, around 100 basic points.
This set of elements allowed the average cost of outstanding debt to increase by nine basis points to 1.73% at the end of 2022, levels, says Economía, “very contained” in historical terms, in a context of sudden increase in interest rates from the European Central Bank. On its side, the average life of the State Debt in circulation stood at 7.9 years.
Promotion of green bonds
The report dedicates a special section to the issuance of green bonds, which will continue to grow in 2022 and also diversify its investor base. So much so that they reached 3,207 million issued in 2022 and a total of 8,207 million euros within the framework of the program that began in 2021.
With these data, the department led by Nadia Calviño considers that green emissions have become a “structural component” of Treasury financing, in such a way that they have contributed to the financing of sustainable public projects, the reduction of the cost of financing, with financial savings of between two and seven basis points, and the promotion of the sustainable finance market in Spain.
