The volume of government debt reached 1.311 trillion euros in December 2020, 10.3% more than at the end of 2019, and rose to 117.1% of gross domestic product (GDP) d ‘last year. Data released yesterday by the Bank of Spain points to a record level of indebtedness in the past year.
In any case, the level of debt of 117.1% of GDP is slightly below the own forecast of 118.8% of GDP made by the Government in the presentation of the State Budget for 2021. Also it is below the estimate of 120.3% of GDP formulated by the European Commission for Spain last November. According to the Ministry of Economy, this improvement in the final result has been possible thanks to “the good performance of the Spanish economy in the second half of the year.” The low level of interest rates on new debt issues has also helped contain spending linked to public debt.
Despite being the highest year-end close in the historical series, debt fell by 1,292 million in December compared to November, the monthly all-time high of 1,312,590 million. The sharp rise in the level of debt is the result of the largest public deficit resulting from the pandemic (with higher spending and the collapse of revenues) and the collapse of 11% suffered by GDP in 2020.
Slight reduction in 2021
By 2021, the Government expects a slight reduction in the rate of public debt on GDP, under the conviction that the increase in this will be slightly lower than projected for economic growth. From the point of view of the European Commission, however, the trend will continue to rise until rubbing 124% in 2022.
In particular, the balance of government debt rose to 1.166 trillion, with a year-on-year increase of 10.5%, while for the other units of the central government the balance was 25 billion, which which represents a decrease of 14.1% over the previous year’s figure.