In the midst of the debate over forgiving 20 percent of the regional liquidity fund debt for Catalonia, amounting to 15,000 million, the proposal from the fourth vice president and head of the Treasury, Maria Jesus Monteroto, to extend a similar relief to all autonomous communities has become a central topic. The latest quarterly public expenditure data confirms that all administrations reached a historical high of 1.577 billion euros in the third quarter. This marks a 0.5 percent rise from the previous quarter and a 4.8 percent year-over-year increase, while the GDP ratio stood at 109.9 percent, according to Bank of Spain data. Autonomies posted total liabilities of 319.924 million during July to September, down 2.27 percent from the second quarter. (Bank of Spain)”
Debt generally decreased across communities after the immediate post-pandemic effects and compared to a year ago. Catalonia, which holds the largest absolute liabilities, reported an average per capita debt of 10,570 euros in the third quarter, a 2.86 percent reduction from the second quarter. This figure is nearly double the per-person debt in the Madrid region, where the average was 5,234.4 euros, down 3.78 percent from the previous three months. (Bank of Spain)”
In the Generalitat of Catalonia, the region also ranked first as a creditor to the state through mechanisms like the FLA, with liabilities totaling 71,308 million euros since 2012 to ease access to markets for autonomies. About 84 out of every 100 euros of total debt were tied to these arrangements. (Bank of Spain)”
Inside the Valencian Community, the region with the highest debt burden relative to GDP, the average per-capita liability fell to 10,437.96 euros in the July-September period, down 3.89 percent from the second quarter. Of the total, 47.594 million euros were pledged to the state, which accounted for roughly 86 percent of the aggregate debt. (Bank of Spain)”
In Andalusia, the most populous autonomous community, the per-capita average stood at 4,357 euros, a 1.44 percent decline versus the April-June period. Debt owed to the government totaled 24,702 million, representing 65.8 percent of the overall liability. Madrid, on the other hand, is cited as a major net contributor alongside Catalonia in the current funding system, with the Balearic Islands reporting an average debt per person of 7,236.57 euros. About 58 percent of the total, 5 billion 178 million euros, is linked to state obligations out of 8 billion 874 million euros overall. (Bank of Spain)”
Reducing the weight of debts across all administrations remains a priority for the government. The 2024 budget plan, submitted to Brussels in October, highlighted the economy’s solid performance and projected 2.3 percent growth for 2023, which could enable a gradual decrease in the debt-to-GDP ratio. It suggested the ratio would rise to 108.1 percent in 2023 and aimed to bring it below 110 percent a year ahead of schedule. The deficit path echoed a similar expectation, with a forecast to reduce the budget deficit to 3 percent of GDP in 2024, accelerating the downward trend toward 2.7 percent in 2025 and 2.5 percent in 2026. (Sources: government documents, Bank of Spain)”
Projected figures show that public debt is expected to continue easing in the coming years, with forecasts indicating a decline from 106.3 percent in 2024 to 105.4 percent in 2025 and 104.4 percent in 2026. (Government projections)”