Spanish public debt falls below 100% of GDP for the first time since the pandemic

BarcelonaThe debt ratio of the Spanish public administrations stood at 99.9% of the gross domestic product (GDP, the indicator that shows the size of an economy) in July, 2.4 percentage points less than in the same period of the previous year, with a total amount of 1.744 trillion euros, according to data published this Thursday by the Bank of Spain. According to the estimate available for July, the ratio would have fallen below 100% for the first time since February 2020, just before the outbreak of the covid-19 pandemic. Then, spending rules were suspended and the debt skyrocketed to deal with the shock caused by the pandemic.

In absolute terms, the debt balance rose to 1.744 trillion euros in July 2026, which implies a year-on-year growth of 3.8%, although it has moved away from the historical highs recorded the previous month, June of 2026, of 1.762 trillion. The state executive expects that by the end of 2026 the public debt ratio will break the 100% barrier and stand at 99.3%, moving forward by one year the objective of falling below 100%, since it was set for the end of this legislative term, that is, during 2027. Although the Spanish government's Medium-Term Fiscal and Structural Plan does include a downward path over the coming years, it is not specified in the executive's projections when Spain will manage to reduce its debt below the prudent levels of 60%, which is the percentage proposed by Brussels.

By administration, the State debt balance stood at 1.589 trillion euros, with a year-on-year increase of 4.2%, which represents 91% of GDP. For other units of the central administration, the balance was 31.088 billion (1.8% of GDP), which represents a decrease of 10.5% compared to the same figure from the previous year.

For its part, the debt balance of the Social Security Administrations stood at 136.176 billion euros, 7.9% more than a year earlier and corresponds to 7.8% of GDP. This increase is due to loans granted by the State to the General Treasury of Social Security to finance its budgetary imbalance. Regarding territorial administrations, the debt of the autonomous communities was 349.305 billion euros in July 2026, equivalent to 20% of GDP, with a year-on-year variation of 2.7%, while the debt of local corporations stood at 21.633 billion euros that month, 7.9% less than that recorded a year earlier.

Regarding the evolution of debt according to instruments and terms, all instruments have shown positive year-on-year variation rates. Thus, long-term securities and loans with a maturity of more than one year recorded year-on-year growth rates of 2.4% and 5.1%, respectively, and short-term instruments showed a year-on-year variation rate of 24.9%.

European comparison

With the new data published by the Bank of Spain, the State is moving further away from the group of the most indebted European countries. Thus, according to the latest data from Eurostat, the highest public debt-to-GDP ratios at the end of the first quarter of 2026 were recorded in Greece (143.5%), Italy (138.9%), France (117.6%), and Belgium (109.1%). The lowest were recorded in Estonia (25.2%), Denmark (26.8%), Bulgaria (28.5%), and Luxembourg (29.2%). Germany, the main European engine, has a debt-to-GDP ratio of 64.4%, very close to the community target of 60%.

Apart from the debt containment programs, the boost in the economy has also played in Spain's favor. The State has been, among the major EU economies, the one that has seen its GDP grow the most in recent years. This fact allows that, even though the total debt continues to grow in absolute terms, it has decreased as a percentage of GDP.