The state’s liabilities have grown by leaps and bounds. Over the past two decades, it has risen from moderate levels to one of the highest in the EU. In 2004, it represented 45.3% of GDP, a figure lower than the European average (67.1%). … and the euro zone (69.7%). However, the 2008 crisis and the recession that followed caused a sudden jump: in just five years, the imbalance practically doubled, reaching 100% of GDP in 2013. Since then, and despite phases of slight reduction, the debt has remained at very high levels, closing the year 2024 at 101.8%. The data is included in the report of the Juan de Mariana Institute “Debt Day”, which is celebrated this Tuesday, the symbolic date on which Spanish administrations exhaust all their revenues and begin to finance themselves with credit.
Spain is the country that has increased its debt the most during this period. While in the EU it increased from 67.1% in 2004 to 81% in 2024 and in the Eurozone there was a rebound from 69.7% to 87.4%, our country “clearly exceeded these growth levels, with an increase of 56 percentage points”. The data moves away from countries like Germanywhich maintains levels similar to those of 20 years ago (around 60% of GDP). “This trend reduces the margin for other uses of public spending or to facilitate tax cuts,” explains the research service led by Manuel Llamas.
Monthly evolution of costs
revalue pensions
Evolution of public debt
central government and GDP
Fountain: Social security and Eurostat /ABC
Evolution of the monthly cost of revaluation of pensions
Evolution of central government public debt and GDP
Fountain: Social security and Eurostat /ABC
Public debt is issued by countries to obtain financing and it is the public administrations of each of them, and not their citizens, which must meet the interest payment obligations acquired in the issuances. In the case of our country, these interests lie around 39,000 million per yeararound 2.4%, which is equivalent to all that was collected by corporate tax in 2024. Spain is the fourth EU economy that devotes the most resources to paying interest; only Hungary (5.0%), Italy (3.9%) and Greece (3.5%) bear a higher burden.
A jump of 24,000 euros
Thus, the virtual balance sheet of the debt that each citizen would have to face if Spain could not respect its commitments to its creditors and if it was the citizens who had to repay this overdraft has exceeded 33,000 euros. In 2004, each Spaniard “carried” around 9,163 euros of public debt, but after the financial crisis and due to accumulated deficits, this figure skyrocketed, exceeding 19,800 euros in 2012 and the aforementioned 33,332 euros last year. The results in ten years exceeded 24,000 euros.
The cost of increasing pensions has increased by 75% in three years; in 2024, it will exceed 3 billion
The evolution of this financial health thermometer of administrations reflects the colossal increase in public spending in recent years, which coincides with tax collection at historic levels. In 2023, revenues reached more than 551 billion, almost double those of 2004. “Although the economy is capable of generating record income“The lack of discipline in spending prevents the debt from being stabilized,” estimates the Institute.
“A critical point”
“The big problem with Spanish public finances is the pension system,” says the research service. Social security no longer existed in 2011 Reserve fund which exceeded 66 billion, until “a critical point in 2024”, with 126 billion in debt. Dependence on state transfers is increasing and since 2005, the state has injected more than 400 billion euros to support pensions, Size of GDP from countries like Austria.
One of the policies that contributes most to the increase in deficit One of the elements of the system in recent years is the revaluation of pensions with the CPI. Until 2021, the monthly cost of a revaluation was approximately 1.8 billion while in 2024, it would exceed 3 billion, or 75% more in three years.
Since 2005, the State has injected more than 400 billion euros to support pensions.
“Even if the number of retirees and initial pension are still relevant factors, indexation to the CPI has become the greatest pressure on Social Security accounts. In 2024, this item already represents around a quarter of total retirement spending, which explains why, despite higher contributions and by increasing state transfers, the deficit continues to widen”, concludes the work of the Juan de Mariana Institute, which highlights that the system accumulates a negative net worth of 98.526 million.
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