Debt held by Spanish public companies outside the Public Administration reached 2.8% of GDP by the end of 2022. The report notes that this portion of GDP declined by four tenths from the previous year, highlighting a tightening of liabilities within the sector. The Bank of Spain published an overview of Spain’s 2022 public debt dynamics, focusing on the composition and evolution of liabilities across publicly owned entities.
Latest updates show that for the third quarter of 2023, public company debt stood at 37.519 billion euros at the close of 2022, rising through the year to 38.736 billion. Despite the absolute increase, the debt burden as a share of GDP eased to 2.7% between July and September 2023, which is one tenth lower than the end-2022 ratio.
In nominal terms, the 2022 reduction in debt amounts to 2 billion euros versus 2021, with the primary decrease concentrated among public corporations. The Central Government maintains a debt balance of about 32,300 million euros, representing roughly 2.3% of GDP.
Within the set of Central Government companies, Adif shows the largest absolute figure with around 16.657 billion euros in debt, followed by Aena/Enaire at 7.148 billion and the Renfe operator at 6.128 billion.
The debt profiles of public enterprises depend on the backing administrations. Regional entities and municipalities account for smaller totals, with 2.7 billion and 2.5 billion euros respectively, and they exhibited only modest changes compared with 2021.
Debt reduction across the economy
The debt-to-GDP ratio of Spanish Public Administrations continued its descent in 2022, a trend that began in 2021 after the sharp rise seen in 2020 amid the epidemic impact.
Specifically, the debt ratio finished 2022 at 111.6% of GDP. It had stood at 116.8% in 2021 and 120.3% in 2020, with the 2022 decline amounting to 5.2 percentage points. This drop is primarily driven by stronger nominal GDP growth, which reduces the relative weight of debt on the economy.
Evidence from preliminary 2023 data indicates the downward path continued, with the debt ratio easing to 109.9% of GDP in the third quarter.
The Bank of Spain explains that the 2022 decrease in the rate of debt increase was mainly due to nominal GDP growth dampening the debt ratio by about 10.8 points of GDP (10.2 points in the prior year). The deficit composition also played a role, as the primary balance and the interest burden rose but contributed less to the overall debt shift than in 2021. The primary balance moved higher, yet the interest burden contributed more, while the deficit-debt adjustment added about eight-tenths of a percentage point to the rate.
On the asset side, there was a notable reduction of 0.7 percentage points in the share held by non-residents in 2022, bringing their participation to 42.5% of the total. This trend mirrors patterns in the Eurozone and major European economies, with the exception of Italy, where non-resident holdings edged up slightly.
Italy and Spain as early movers in EU debt reduction
Spain’s 2022 debt ratio decline aligned with a broader European trend, as the Eurozone average debt ratio fell by 3.8 percentage points to 90.9% of GDP in 2022 (down from 94.7% in 2021). This reduction largely stems from nominal GDP growth across the region.
Among the largest EU economies—Germany, France, and Italy—the changes were 2.9 points, 1.1 points, and 5.4 points respectively. Germany posted a debt-to-GDP ratio of 66.1%, France 111.8%, and Italy 141.7%.