The debt of all Public Administrations increased in August to 103% of GDP, consolidating a new milestone in absolute terms. The total balance stood at 1,699 billion euros, according to data released by the Bank of Spain.
Compared to July, when the ratio stood at 102,3%., the monthly increase was 0,69 percentage points and 19.160 millones de euros in amount, which is equivalent to an increase of 1,14% in the month. Compared to a year ago, debt as a proportion of GDP falls 0,9 points, although in euros it grows a 4,7%. from 1,62 trillion.
Recent developments: upward ratio for the month and maximum volume
With the available progress information, the PDE debt (according to the Excessive Deficit Protocol) climbed to 103% in August, maintaining the monthly upward trend and confirming a historical maximum In absolute terms, the Bank of Spain specifies that the monthly increase is concentrated in the State and, to a lesser extent, in Social Security.
Year-on-year, the debt-to-GDP ratio improves 0,9 percentage points compared to the same month of the previous year. This improvement in the ratio coexists with an increase in euros of 4,7%., a combination attributable to the nominal growth of the economy and public financing needs.
Breakdown by subsectors: the State leads the increase
The balance of the State budget amounts to 1,546 billion euros, which represents 93,7% of GDP and represents a year-over-year growth of 4,9%. This component accounts for the majority of public sector debt and explains a large part of the monthly increase.
In the Autonomous Communities, debt stands at 340.242 billion, equivalent to 20,6% of GDP, with a 1,9% increase over the past twelve months. The trend remains moderate, albeit positive.
The Local Corporations reduce their balance to 22.690 billion (1,4% of GDP), 1,5% less than a year earlier. They are, in fact, the only level of administration that manages cut debt in year-on-year terms.
La Social security raises its debt to 126.173 million, 7,6% of GDP and 8,6% more year-on-year. The regulator attributes this increase to the State loans to the General Treasury to cover the system's budget imbalance.
Official forecasts and European framework
The Government plans to close the year with a ratio of 101,7% of GDP and draws a downward trajectory in the medium and long term: 98,4% in 2027, 90,6% in 2031 y 76,8% in 2041However, the projections do not specify when a level considered "prudent" according to Brussels will be recovered, that is, below the 60% of GDP.
These goals are framed within the full return of the European tax rules and the PDE methodology. The path is based on nominal GDP growth, deficit adjustment and a debt management that prioritizes deadlines and costs of financing.
Keys to interpreting 103% of GDP
Although the weight of debt on the economy is lower than a year ago, the absolute volume reaches a maximum, which keeps the focus on the cost of interest and the ability to refinancing in a context of higher rates than in the previous stage.
The combination of GDP growth, deficit control, and spending discipline are key factors in further reducing the ratio. At the same time, the decline in local debt underscores the potential for improvement across the board. administrations if the accounts are consolidated.
Highlights in figures
- 103% of GDP in August (102,3% in July): +0,69 pp in the month.
- 1,699 billones in total balance: +19.160 billion monthly and +4,7% year-on-year.
- State: 1,546 billion (93,7% of GDP, +4,9% yoy).
- CCAA: 340.242 million (20,6% of GDP, +1,9% yoy).
- Local: 22.690 million (1,4% of GDP, −1,5% yoy).
- Social Security: 126.173 billion (7,6% of GDP, +8,6% yoy).
The August movement leaves a mixed picture: slightly higher ratio which in July, lower than a year ago, and a new ceiling in euros. The focus, from now on, will be on how GDP growth, interest rates and the public deficit evolve to get the deceleration of debt.