The amount of public debt continues to break records every month and figures for June published by the Bank of Spain today (Wednesday 17 August) showed that the government owed 1,475 billion euros. The sum had risen by 19 billion euros in just one month.
This high volume of debt amounts to 116.8% of GDP, above the government’s target for 2022, which was set at 115.2%. It is a record figure, occurring at a time when the European Central Bank has raised interest rates, which will make the cost of financing the debt even more expensive. In fact the Fiscal Authority (Airef) warned recently that financing the public debt will cost the State 32 billion euros more between now and 2025, because of the rise in interest rates.
Compared with a year previously, the debt increased by 52 billion euros, due to the extra expenditure resulting from the pandemic and the war in Ukraine.
Despite this, the Ministry of Economic Affairs has said it is seeing a “clear deceleration” in the evolution of the debt since the peak of the pandemic and it pointed out that this is the first time the debt/GDP ratio has dropped below 117%.
It attributed the reduction in the second quarter of the year to an acceleration in economic growth and said the figure is compatible with the forecast for a debt of 115.2% of GDP which the government sent to Brussels in April.