Spanish debt in foreign hands breaks record in June and exceeds 47%

The Spanish debt in the hands of foreign investors again broke a record in the first half of 2019 and stood at 467,854 million euros, which already accounts for 47.04% of the total, which amounts to 994.604 million.

According to data updated by the Public Treasury, in just one month, foreign investors raised their positions of Spanish debt by more than 15,000 million euros, 3.3%, amid the failure of negotiations to form a government, which led to in a new electoral call for the month of November.

Compared with the data for the same month of 2018, Spanish titles in foreign hands grew by almost 12%, equivalent to 50,000 million, while between January and June they increased by 8.1% or 35,138 million euros, from the 432,716 million added in December 2018.

The experts consulted by Efe consider that this increase is due to several reasons, such as the transfer of large amounts of variable income to fixed income that large investment funds have been carrying out for several months due to the weakness of the exchanges.

It is also influenced by this appetite for national debt that the profitability of German bonds is at record lows, which makes investors opt for the debt of countries that are still considered safe "despite political uncertainty and that we go to the fourth elections in four years, "they explain from XTB.

"We have not been able to form a stable government, but foreign investors are not afraid that the one that arises will finally go against the objectives of the European Union," argue these experts.

The stimulus measures for the European economy recently decided by the ECB "will have less impact" now and "will not be able to generate growth by themselves", as we are going into a recession, so it is imperative that governments "counterattack" with more Measures such as tax increases.

In the opinion of Rui da Mota Guedes, a consultant in the market area of ​​International Financial Analysts (AFI), the increase in the percentage of Spanish debt in foreign hands is also explained by the fact that investors are increasingly confident in the Spanish economy and its ability to pay that debt.

For this expert, political uncertainty is not having "so far" any impact on the confidence of foreign investors in Spanish public debt.

In addition, last week the rating agency Standard & Poor's raised the credit rating of Spain to "A", the highest since the crisis.

From Barclays they believe that in this increase of national titles in foreign hands also influences the deceleration of the world economy, a trend that they hope will continue "until well into 2020, although avoiding a recession itself."

The key political risks remain unresolved, bank analysts add, who foresee a "brexit" without agreement in the first quarter of 2020 and see "unlikely" that the US-China trade dispute will be resolved.

And as for Spain, Barclays considers that the elections "generate uncertainty", but stresses that this will not cause the economy to go astray, nor does it believe that there will be a coordinated fiscal policy of relevance in response to the circumstances.

. (tagsToTranslate) Spanish (t) foreign debt (t) (t) record (t) exceeds

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