Spain’s public debt climbed sharply in September to a new record high of 954.863 billion euros, casting doubt about the government’s ability to meet its target for the end of the year.
According to figures released Friday by the Bank of Spain, the state’s outstanding obligations climbed 10.181 billion euros in the month from August to a level equivalent to 93.4 percent of GDP. The government’s target for the full year is 94.2 percent, a figure that has already been revised upward. The central bank estimated GDP in the 12 months to September at 1.022 trillion euros.
“There are concerns about the pace of the increase,” Finance Minister Cristóbal Montoro acknowledged at a news conference after the regular Friday Cabinet meeting. Montoro said the rise made bringing down the public deficit even more of a priority.
The Treasury took advantage of favorable market conditions in September to issue 17.247 billion euros in public debt when maturities amounted to only 7.479 billion. It issued a further 20.120 billion euros in October, although maturities for that month totaled 23.981 billion, meaning that next month’s figures from the Bank of Spain should show a fall in total outstanding public debt.
A further 20 billion euros in public debt is due to mature before the end of this year. The Treasury can call on a cushion of 43.380 billion euros to do so as well as funds from new debt issues. However, the debt management arm of the Economy Ministry will need to pump more funds into the kitty the government has created to pay money owed to suppliers of goods and service.
Public debt is expected to rise to about the same level of GDP next year, surpassing 100 percent of output the following year.