The debt of all public administrations has registered an increase of 5,312 million euros in August compared to July, which represents an increase of 0.3% in one month, reaching the figure of 1,623 billion euros, according to the data published this Tuesday by the Bank of Spain.
Despite this increase, the debt of 1,623 billion euros does not exceed the maximum reached last June (1,626 billion euros), although it is the second highest figure in the series in absolute terms.
The rise in public debt in August compared to July is mainly due to the increase in State debt, while both the autonomous communities and city councils register a slight decrease and the Social Security debt remains unchanged.
In the last year, public debt has grown by 3.7%, with 58,097 million euros more, as a result of lower income and higher expenses derived from the pandemic crisis and the war in Ukraine and the rise in prices.
In this monthly preview, the Bank of Spain does not offer data on the weight of debt over GDP (measured as a quarterly percentage), but the latest data offered by the organization suggest that debt stood at the end of the second quarter at 105.3% of GDP.
This percentage is lower than the 106.3% recorded in the first quarter of this year and the 108.8% in the second quarter of 2023, although it is 0.2 percentage points above the figure recorded at the end of 2023 (105.1 %).
The Executive’s estimates point to a downward path in public debt in the coming years. In the medium-term structural fiscal plan, recently sent to Brussels, the Government foresees that the debt-to-GDP ratio will fall from 102.5% in 2024 to 98.4% in 2027, to 90.6% in 2031 and to 76.8% in 2041.
Although a downward path is seen over the next few years, it is not specified in the Executive’s projections when Spain will be able to reduce its debt below the “prudent” levels of 60% proposed by Brussels.
The State goes up and the Autonomous Communities and municipalities go down
In the breakdown of the data for August, the State recorded a debt of 1,474 billion euros, which represents an increase of 5.5% compared to August of the previous year, and an increase of 0.6% compared to the previous month.
The autonomous communities, on the contrary, have reduced their debt in the eighth month of the year, to 333,945 million euros, which represents a decrease of 0.2% compared to July, but they have increased their debt by 2.5% in the last year.
City councils, for their part, have registered a debt of 23,023 million euros in August, in this case 3.6% less than in July, while the interannual rate has fallen by 1%.
Finally, as usual, the Social Security debt has remained stable in the eighth month of the year, standing at 116,171 million euros, although this is 9.4% more than in the same month of the previous year.
The Bank of Spain specifies that this year-on-year increase is due to the loans granted by the State to the General Treasury of Social Security to finance its budget imbalance.
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