May 19, 2020 / 1:07 PM / 7 days ago

Spanish public debt rises to record high in March - Bank of Spain

MADRID, May 19 (Reuters) - Spanish public debt rose in March to a record high of 1.224 trillion euros ($1.34 trillion), mainly lifted by the financing of government measures to smooth the impact of the coronavirus outbreak, Bank of Spain data showed on Tuesday.

The total volume rose by almost 22.5 billion euros in March, pushing the debt-to-GDP ratio to 98.92% from 97.1% in February according to Reuters calculations based also on data released by the Spanish Statistics Institute (INE).

The Bank of Spain did not publish the debt-to-GDP ratio for March.

The Spanish public debt’s previous record was 1.207 trillion euros in June last year.

The latest debt figures come after Bank of Spain’s governor Pablo Hernandez De Cos on Monday called for a broader political agreement from parties in order to adopt a long-term strategy of fiscal consolidation and structural reforms.

A government source said that new debt figures were taking into account extraordinary measures to cushion the effect from the COVID-19 pandemic.

When Spain presented earlier in May its updated stability programme to the European authorities, it forecast a 9.2% economic contraction in 2020, surpassing the one during the country’s financial meltdown of 2008-2013.

It also said then as part of its 2020 stability plan that expenditures for extraordinary measures to furlough staff and other social benefits for vulnerable people would reach 28.4 billion euros, while government revenues would shrink by 6.12 billion euros.

The government also revised the 2020 deficit forecast to 10.34% of GDP and said it expected the debt-to-GDP ratio to rise to 115.5% at the end of 2020. The new deficit target compares to a goal of 1.8% of GDP set in February.

$1 = 0.9121 euros Reporting By Jesús Aguado; additional reporting by Emma Pinedo and Jose Elias Rodriguez; Editing by Inti Landauro

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