Public debt already just short of goal for the full year

Spain’s outstanding public debt climbed to 93.4 percent of GDP in the first nine months of the year, leaving it at less than a percentage point from the government’s target for the full year, according to figures released Friday by the Bank of Spain.

Given the pace at which the Treasury has been issuing new debt, the ratio is expected to surpass the goal of 94.2 percent set by the conservative Popular Party administration. The ratio at the end of September was 1.2 percentage points higher than it was at the end of June and was the highest on record since the first decade of the 20th century.

The sharp rise in the country’s indebtedness is largely explained by the need to cover successive public deficits since the current crisis broke around the end of 2007. The government is targeting a shortfall of 6.5 percent of GDP for this year.

The debt-to-GDP ratio hit a low of 36.3 percent six years ago. The government expects a ratio of 98.9 percent of GDP next year, which would be the first time ever it has exceeded one trillion euros.

The rise in debt has evidently been accompanied by a big increase in interest payments by the government, which for this year are expected to hit a record level of around 30 billion euros despite a notable improvement in market conditions that has helped lower borrowing costs.