In 2020, Spain’s financial debt reached its highest level in more than a century. Due to the global covid-19 pandemic, the debt is over 112 billion euros.
The ratio of debt to size of the Spanish economy increased from 95.5% of GDP in 2019 to 117.1% in December 2020 – the highest level in more than a century.
In 1902, the country’s debt-to-GDP ratio reached 123.6%, according to estimates released this week by the Spanish Central Bank.
In other words, this means that each of the 46.9 million citizens of the country actually has a debt of more than 27,900 euros, which exceeds the average annual salary in Spain – 27,500 euros.
The amount of debt in 2020 is so large that it would be necessary to distribute all government revenue from taxes and social contributions over three full fiscal years (or freeze the payment of pensions for nine years) to be able to pay it off.
The reason for the debt
The main cause of the country’s debt is the covid-19 pandemic. It was because of her that the country was forced to close its borders in 2020 in order to contain the outbreak of the coronavirus.
“This is the result of direct assistance and measures introduced to respond to the health situation, economic and social impact of covid-19,” commented Spanish Finance Minister Nadia Calvigno.
How Spain’s debt grew
In 1902, the ratio of debt to GDP reached 123.6%.
In 2019, the debt-to-GDP ratio was 95.5%.
In December 2020, the debt to GDP ratio was 117.1%.