Public debt soars by 27,000 million in June and sets a new record

Never before has the figure been so high and, according to data from the Bank of Spain, using the nominal GDP of the last four quarters to verify its weight in the economy, the debt to GDP ratio stood at 113.1% at closing the second quarter of 2023.

In absolute terms, the accumulated debt at the end of June implies 27,000 million euros more than the previous month. And it is 93,000 million more than in June 2022, in full deployment of anti-crisis measures to deal with the crisis over the war in Ukraine.

As is logical, the monthly rise in debt in June is mainly due to the increase in State indebtedness and, to a lesser extent, that of the autonomous communities and town halls. On its side, the Social Security debt has remained more or less stable in the sixth month of the year.

Despite the fact that autonomous communities and town halls tend to have greater control of their public accounts, the new scenario of interest rate rises has set off alarm bells regarding their management. The last to do so have been the analysts from the Foundation for Applied Economics Studies (Fedea) who, in a recent study, indicated that while in 2022 regional spending on debt interest was around 3,600 million euros, this year it will amount to 4,174 million.

And the figure will increase to 8,659 million euros in 2026. In other words, it will multiply by more than two the resources that the autonomies currently allocate to satisfy this financial burden. In other words: 5,051 million euros more will have to be dedicated to servicing the debt than in 2022 (4,485 million if the estimate for this year is taken as a reference), money that will have to be taken from other spending items.