The public debt of the central government reached an all time high in the second quarter, totaling 1.569 trillion euros in absolute terms, while its share of GDP eased to 111.2 percent, according to latest data published by the Bank of Spain. In the previous year, the total debt rose by 92.551 billion euros, a 6.3 percent increase. Yet the debt burden as a share of GDP fell as the economy grew more rapidly, reflecting a stronger gross domestic product update by the INE. The trend shows a government borrowing pace that expands in nominal terms but recedes as a proportion of national output due to faster economic activity.
Under the stability program announced in April, the debt forecast for 2023 stood at 111.9 percent of GDP, with an expectation that the ratio would dip below 110 percent in 2024, specifically around 109.1 percent. Following the INE update, the incumbent government aligned the target to fall under the 110 percent threshold within 2023. This adjustment highlights how revisions to macroeconomic indicators can shift debt targets and policy expectations in real time.
With regard to regional governments, autonomous communities carried a debt load of 327.346 billion euros as of June 2023, representing 23.2 percent of GDP. Local governments and public entities carried obligations totaling about 24.0 billion euros in the second quarter of 2023, equivalent to 1.7 percent of GDP and up 0.8 percent from the year before. These figures illustrate how borrowing dynamics differ across levels of government and how regional financing interacts with national macro aggregates.
Catalonia and Madrid
Catalonia continues to hold the largest debt stock per citizen, averaging about 10,881 euros per person as of the end of June. This represents a 1 percent rise from the prior quarter, supported by a population census increase recorded on July 1. Total liabilities for the community stood at 86.8 billion euros at June 30, with roughly 84 percent of this amount outstanding as state credit through mechanisms such as the regional liquidity fund. This structure indicates how regional authorities rely on state-backed instruments to manage liquidity needs.
Madrid, the other major economic hub within the state, shows a different profile. The per capita debt is around 5,441 euros, based on a total of 37.658 billion euros, with a slight quarterly decrease of 0.02 percent. The population census as of July 1 also rose compared with April, which factors into the reported debt level. In this autonomy, the state does not act as a direct creditor under the liquidity tools in the same way as others do, signaling a distinct financing approach for Madrid.
State as creditor
Compared with the Catalonia and Valencian Community, the Valencian Community shows an average debt per capita of 10,861 euros, up more than 2 percent from the previous quarter. The total debt for this autonomous region is 57.246 billion euros, and the state acts as creditor for about 84 percent of that amount. Andalusia, the most populous region after Madrid, records an average per-capita debt of 4,420 euros, with a total of 38.018 billion euros and the state carrying around 66.8 percent of that liability. These figures illuminate how the central government shoulders a substantial portion of regional liabilities while regional economies vary in borrowing behavior.
Debt rose in absolute terms across almost all autonomous communities versus the second quarter of the previous year, with a few exceptions such as Aragon, the Balearic Islands, Cantabria, Navarra, and the Basque Country. The leading concentrations of debt by region are Catalonia (86.8 billion euros), Comunitat Valenciana (57.246 billion), Andalusia (38.018 billion), and Madrid (37.658 billion). Other regions follow in descending order including Castile-La Mancha, Castile and Leon, Galicia, and Murcia, among others. Regional debt levels reflect diverse fiscal capacities and investment needs across Spain.
As a share of GDP, the Valencian Community emerges as the debt leader at 43.5 percent, followed by Catalonia at 32.4 percent, Castile-La Mancha at 32.1 percent, and Murcia at 32.1 percent. The ranking also includes the Balearic Islands at 25.3 percent, Extremadura at 22 percent, Cantabria at 20.8 percent, and Aragon at 20.5 percent. The Community of Madrid registers a ratio of 13.7 percent, with Navarra at 13.3 percent and the Basque Country at 13 percent. These percentages show how regional debt burdens relate to local economic output and fiscal structure.
Looking at municipal scale, districts with populations over 300,000 accounted for about 5.141 billion euros of debt between April and June, a rise of 157 million euros from the same quarter a year earlier. Madrid remains the highest indebted city with around 1.886 billion euros, followed by Barcelona at 1.155 billion and Zaragoza at 616 million. These numbers illustrate how urban centers bear significant financing responsibilities, often reflecting infrastructure needs and service demands.