The total debt exposure of public administrations reached a record high of €1.504 trillion in the third quarter, according to data released by the Bank of Spain on Wednesday. While the debt’s share of GDP has eased somewhat, the ratio continues to hover around 116 percent. This reflects an increase of roughly 2 percent compared with the prior quarter, underscoring ongoing pressure from fiscal needs and financing costs faced by the public sector.
Year-on-year, the debt level rose by €71.458 billion, marking a 5 percent increase from the same quarter a year earlier. Analysts point to reduced revenues coupled with higher expenditures tied to the lingering effects of the pandemic, alongside new pressures from the war in Ukraine, as key drivers behind this uptick.
The debt-to-GDP ratio stood at 116 percent, aligning with the targets established in the government’s Stabilization and Budget Plan. It sits slightly below the second quarter, which recorded 116.1 percent, yet remains above the annual target of 115.2 percent that has been communicated to Brussels. The government emphasizes that the trajectory remains within the planned corridor, even as it contends with the need to sustain essential public services and investment in growth-enhancing measures.
Under the 2022-2025 Stabilization Program, the plan envisions a gradual consolidation of the deficit over four years, with the goal of reducing the debt-to-GDP ratio to 109.7 percent by 2025. The strategy hinges on a combination of disciplined spending, measured revenue improvements, and maintaining confidence in the fiscal framework that supports long-term economic stability.