November 25, 2020

Public debt marks a new maximum in August and is close to 1.3 trillion



The debt of the public administrations as a whole rose by 8.6% in August with respect to the same month of the previous year, as a consequence of the higher spending derived from the crisis of the coronavirus, and adds 102,586 million euros more in the last year, according to data published this Thursday by the Bank of Spain.

Only in the month of August it added 7,537 million euros more, 0.6% above the data of July, for which it returned to mark a new historical maximum of 1,298,736 million euros, according to data published this Thursday by he Bank of Spain.

In this way, public debt remains above 100% of GDP (exceeds 105%), with the Government’s forecast being a ratio of public debt over GDP 118.8% this year.

The increase in debt in August is due to the increase in indebtedness in the State and the Social Security, which have had to make an extra spending effort due to the impact of the coronavirus crisis, as a result of the establishment of the state of alarm on March 14 and the royal decrees approved to alleviate the crisis.

Meanwhile, autonomous communities and local corporations reduced their indebtedness somewhat compared to July.

The state raises its debt

Thus, the state debt it rose 0.7% in August compared to July, with 7,965 million less, to a figure of 1,161 billion euros, remaining at its historical highs. Compared to the previous year, it increased by 10%, adding 106,254 million in the last 12 months.

For its part, public debt of the autonomous communities fell slightly in August, with a decrease compared to July of 344 million euros, 0.1% less, to 302,689 million. In the last year, regional debt has grown by 1.4%, adding 4,066 million euros.

In turn, local corporations lowered their debt by 1.9% in the eighth month of the year, with a fall of 469 million, to 24,557 million euros, and a year-on-year reduction of 4.2%, with 1,061 million euros less than indebtedness.

Debt record in Social Security

Finally, the debt of the Social Security administrations marked a new all-time high by rising 5.4% month-on-month, with 3,746 million more, to 72,605 million euros. In fact, year-on-year it grew by 41.8%, totaling 21,412 million euros 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 the pensions, whose monthly bill currently exceeds 9,800 million euros, but in the months in which there is extra pay, it doubles.

The Government recently announced a transfer to Social Security of 18,396 million next year, to assume 1.7 points of its deficit, leaving the deficit reference at 5.2%.

The public debt closed 2019 at 1.18 trillion, the equivalent of 95.5% of GDP, below the target set by the government 95.9% of GDP.

For this year the Government set a goal of reduction up to 94.65% of GDP, which however, as a result of the Covid-19 crisis, was updated in October to raise the estimate to 118.8% of GDP, with a forecast of 117.4% of GDP on next exercise.

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