The balance of Spain’s public debt stood at 1.56 trillion euros, marking a new peak in June. Yet its ratio to GDP slipped to 111.2% after the INE upgraded growth for 2021 and 2022, signaling healthier economic momentum alongside higher debt levels.
Bank of Spain statistics released on Friday show that Spain’s public debt rose by 6.3% year over year in the first half. Despite the headline increase, the debt burden as a share of GDP decreased slightly, reflecting stronger nominal growth for the economy. This revision follows the National Statistics Institute’s recent update that raised growth estimates for 2021 and 2022. The 2021 rate was adjusted to 6.4% (0.9 percentage points higher) and 2022 to 5.8% (0.3 points higher).
Following the new data, the Independent Authority for Fiscal Responsibility AIReF revised its projections for Spain’s debt outlook. It now expects the public debt ratio to land between 108% and 109% of GDP this year, a modest improvement over the July projection of 110.1%.
The government debt rose by 7.1 percent
The overall government debt reached 1.42 trillion euros, registering a 7.1% year-on-year increase. Social Security liabilities grew to 106,000 million euros, up about 7% from the previous year. The autonomous communities carried a debt load of 327,000 million euros, up 3.4% year over year, while local government borrowing rose by 0.8% to reach around 24 billion euros.
Among autonomous communities, the largest absolute debts were held by Catalonia at 86,800 million euros, the Valencian Community at 57,246 million, Andalusia at 38,018 million, and Madrid at 37,658 million. Those with the smallest debt burdens were La Rioja at 1,760 million and Navarra at 3,175 million. In relative terms, the Valencia region posted the highest debt ratio to regional GDP at 43.5%, followed by Catalonia at 32.4%. Castilla-La Mancha and Murcia each stood at 32.1%, while the Basque Country (13%), Navarra (13.3%), and Madrid (13.7%) had the lowest shares.
Within municipalities comprising groups of more than one city, the largest borrowings were observed in Madrid, approaching 1.886 billion euros, Barcelona at 1.155 billion, and Zaragoza at 616 million.
The government foresees debt staying below 110 percent this year
Economic authorities from the Ministry of Economic Affairs have asserted that prudent fiscal management coupled with a robust economic recovery will keep the debt-to-GDP ratio on a downward trajectory through the year, aiming to drop below the 110% threshold.
Officials also note that the Stability Program and the European Commission projections remain favorable. They highlight a record 5 percent reduction in the public debt rate achieved in 2022 as part of the consolidation effort.
In explaining the outlook, ministry representatives emphasize that the international context remains uncertain. Nevertheless, Spain has maintained strong investor confidence through durable, broad-based demand for its debt.