Years-long public debt surges by an additional 61,000 million, equivalently amounting to 102.3% of the country's GDP, demonstrating a perceived mitigation of its impact.
In the midst of 2025, Spain's public debt stands at a concerning 102.3% of the country's GDP, according to data disclosed by the Bank of Spain (BdE) [2]. This figure, while a decrease of 2 percentage points from the same period the previous year, indicates that the debt may be stagnating around the 100% mark [1].
The reduction in public debt, which was over 120% of GDP five years ago, has slowed in 2024 and 2025. This deceleration can be attributed to a narrowing growth-borrowing cost differential, fiscal policy adjustments, and external factors such as the end of pandemic-era fiscal support and the transition to a higher interest rate environment [1].
A breakdown of the debt by sub-sector, such as the central government, regional governments, social security, and local corporations, was not provided in the latest data [2]. However, the overall government debt is diversified across domestic and non-resident investors, with foreign holdings increasing by €98 billion between December 2023 and April 2025 [3].
The total debt balance for May 2025 is 1.663 trillion euros, an increase of 61,000 million euros from the previous year. The debt issued in long-term values showed an interannual growth of 3.8%, while short-term instruments showed a positive interannual variation rate of 6.6% in April 2025 [2].
The State's debt balance was 1.509 trillion euros in May 2025, representing a 4.4% year-on-year increase. The debt of the Communities increased by 0.9% year-on-year, while the Local Corporations' debt decreased by 1.1% year-on-year. The debt of the Social Security Administrations increased by 8.6% compared to the previous year, and the debt of Other Units of the Central Administration decreased by 1.4 million euros so far this year, but due to consolidation, the debt increased by 8 million [2].
The debt of Municipalities was 23 million euros in April 2025, equivalent to 1.4% of GDP, and was 1.1% lower than the previous year. The consolidated debt of Public Administrations in April 2025 was 367 million euros, an increase of 3.4% compared to the previous year, representing 22.6% of GDP [2].
In terms of the debt balance compared to the end of the previous year, it increased by 43 million euros. The debt of CC.AA. was 336 million euros in April 2025, equivalent to 20.7% of GDP, and showed an interannual variation of 0.9% [2]. Loans with a maturity of more than one year decreased by 0.3% compared to the same month of the previous year [2].
The outlook for Spain's public debt trajectory is highly sensitive to the balance between economic growth and the cost of borrowing. With growth slowing and real interest rates rising, further substantial reduction in the debt-to-GDP ratio will require more aggressive fiscal consolidation than currently projected [1].
Fashion industries may face challenges due to the slowing reduction in public debt, as increased borrowing costs could negatively impact businesses' access to capital. The diversification of government debt across domestic and foreign investors could potentially open opportunities for finance agencies specializing in foreign exchange investments.
