A strong year for the treasury ended with the last auction of the year. The utility closed a year with 30% of invoices tied to short term assets of 3 to 18 months held by private individuals. Retail investors have lately shown a clear interest in buying these leased assets. They raised their holdings beyond what major banks offer for deposits, reaching 21.3 billion euros by the end of September 30. This marks an unusually high level, contrasting with the 2.4% share recorded at the close of last year.
The same trend is seen with non-resident investors. They boosted their ownership of government debt, achieving a share of 40.7% in both absolute and relative terms.
Exports for 2023 ended with a total net figure of 65,000 million euros, down 5,000 million from the original plan. Gross exports stood at 252,000 million. The fall in net funding aligns with state commitments to reduce the deficit and lower the debt ratio. In terms of gross domestic product, the latest estimates project the ratio to fall to 108.1% in 2023 and to 106.3% in 2024.
Increase in interest rates
The Treasury notes that targets were met within a defined backdrop of international uncertainty, rising interest rates, and the ECB ending its net purchases. Yet demand remained strong, with significant participation from international investors in both syndications and ordinary tenders, even if levels stayed limited.
State agencies explain that this dynamic has helped financing costs dip despite higher rates. The total cost of debt now sits at 2.09%, only 36 basis points higher than last year, with a funding rate around 3.4% on average for debt issued this year. The typical debt maturity has lengthened to nearly 8 years, which helps ease the impact of rising rates and lowers refinancing risk for the treasury.