HE State We expect to need it this year. less external financing Thanks to the economic growth, which is expected to be lower but still positive compared to 2023, a new development is in line with the target of fulfilling the commitments. cleaning of public accounts. The state therefore hopes to publish 55 billion net During this financial year, 10.126 million less Last year. Instead of, gross emissions (Not only new ones, but also those who renew their due debts) 257.572 million Euro, 2% and 5.577 million more in 2023 due to the increase Depreciation refinance.
Regarding this last figure, in any case, the new Minister of Economy, Carlos Body also emphasized that this is also a representation. Decrease relative to GDP (by 17%), in line with 2018 gross depreciation data (18% of GDP). “We determined the Treasury’s 2024 financing strategy as follows: common sense And flexibility. A solid position, deep market reach and stable risk premium. This stability in risk premium is a reflection of high growth. investor confidence “in our economy and in Spain’s economic prospects,” he defended, stating that this would also enable production. “bed” facing unforeseen events.
The body also assured that reducing the debt issued would enable the Government to achieve its target. reduce debt ratio It will reach 106.3% of GDP by the end of this year, a 19-point decrease from the peak of the first quarter of 2021. He also pointed out that gross Treasury Bill issuance will also increase. 84.454 million The euro is a similar figure to last year, a year in which these issuances were reduced to extend the overall life of the debt in circulation – despite the anger it caused among retail investors.
take the hit
The truth is that state finances have been able to meet these needs so far. increase in rates interest civil servants Certainly tackling inflation better than expected. The European Central Bank (ECB) increased the price of money by up to 4% from July 2021 to last September, but emissions There was public debt average rate of 3.4% (compared to 1.35% in 2022 and -0.04% in 2021). As a result, the average debt ratio increased to 2.09% in circulation. This is the second increase after rising for the first time in a decade in 2022 (from 1.64 per cent to 1.73 per cent), but is significantly lower than the rates recorded by central bank rates (0.45 per cent versus 4.5 per cent).
The Treasury also benefits from its strategy. prolong half life Borrowing by taking advantage of a period of extremely low interest rates before the inflation crisis broke out. Thus, while it was 6.2 years in 2013, it is now approximately 6.2 years. eight years. According to Body, this allows the debt to be paid off. renew every year is currently equivalent 12-13% of balance This helps cushion the blow of the ECB’s rate hike. The significant demand also made it possible to absorb the impact of the end of the ECB’s net borrowings.
future challenges
But it’s not all good news. According to the Savings Bank Foundation (Funcas), the interest rate on new 10-year title deeds will be this year more expensive those maturing bonds For the first time since 2011. In this sense, the Independent Financial Responsibility Authority (airef) predicts that the average interest on outstanding loans will continue to increase until it reaches this level in the coming years. 2.8% in 2026.
Moreover, the ratio of public debt to GDP will decrease this year, but not in absolute terms. According to the Budget Plan sent by the government to the European Commission a few months ago, it reached 1.58 trillion euros (108.1% of GDP) by the end of 2023 and will amount to: 1.64 trillion in 2024 (106.3% of GDP). This will raise spent public administrations interest payment public debt will increase from 35,550 million euros (2.4% of GDP) in 2023 to 39,078 million euros in 2024 ( 2.5% of GDP).
Source: Informacion
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