Public debt fell slightly in October, but remains at around 114% of GDP


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The debt of the public administrations as a whole continues at historical highs as a result of higher spending and lower income derived from the coronavirus crisis, although in October it moderated slightly, with a decrease of 0.15%, to 1,306,028 million euros, according to data published this Thursday by the Bank of Spain.

Despite the slight decrease of 2,057 million, the first registered in the whole year, the public debt in October was close to 114% of GDP (using the nominal GDP of the last four quarters), compared to the Government’s estimate of 118 , 8% for the whole of 2020, and in the last year toaccumulates an additional 115,051 million euros, 9.7% more.

The decrease in debt in October is due to a fall ofstate indebtedness, since the Social Security debt, which has had to make an extra spending effort due to the impact of the coronavirus crisis, has continued to grow and set a new all-time high.

Meanwhile, the autonomous communities, which in the last three months (July, August and September) have seen their debt reduced as a result of greater transfers from the State pto face the health crisis, recorded an increase in their debt in October, while local corporations reduced it very slightly.

Specifically, the state debt fell in October by 8,188 million of euros, with a decrease of 0.7% compared to September, to 1,163,316 million euros, a figure very close to the historical maximum. Compared to the previous year, it increased by 10.7%, adding 112,715 million in the last 12 months.

For its part, the debt of communities increased by 0.3%, to 302,686 million euros, while in the last year regional debt has grown by 1.2%, with 3,785 million euros more.

Instead, local corporations lowered 1.1% its debt in the tenth month of the year, with a fall of 280 million, to 23,464 million euros. Year-on-year, it fell 7.8%.

Social Security debt, at maximum

Finally, the debt of the administrations of the Social Security it continues without yielding and in October it marked a new all-time high by rising 3% month-on-month, with 2,249 million more, to 77,104 million euros. In fact, year-on-year it grew by 43.5%, accumulating 23,410 million more in just one year.

This rise in debt is due to the loans that the State has granted to Social Security in recent years to guarantee the payment of pensions, whose monthly bill is close to 10,000 million euros, but in the months in which there is extra pay, it doubles.

The public debt closed 2019 at 1.18 trillion, equivalent to 95.5% of GDP, below the goal that the Government had set of 95.9% of the GDP.

For this year the Government set a reduction goal to 94.65% of GDP, however, as a consequence of the Covid-19 crisis it was updated in October to raise the estimate to 118.8% of GDP.

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