Spain increased its debt in 2020 by €112,438 million – almost the equivalent of the annual cost of pensions in the country – due to the heavy impact of the COVID-19 pandemic, EURACTIV reports.
The ratio of debt related to the size of the Spanish economy soared from 95.5% of GDP in 2019 to 117.1% in December 2020 – the highest level in more than a century.
To find another record, one has to go as far back as 1902, when the country’s debt-to-GDP ration reached 123.6%, according to estimates published this week by the Spanish Central Bank.
Put differently, this means that every one of the country’s 46.9 million citizens virtually has a debt above €27,900, higher than the average annual salary in Spain, which reaches €27,500.
The volume of debt reported for 2020 is so big that it would be necessary to allocate the entire public income derived from taxes and social contributions of three full fiscal years (or freeze the payment of pensions for nine years) to be able to pay the accumulated debt, according to experts quoted by Spanish media.
Such a record level of debt comes as a direct consequence of the gigantic 10.3% public deficit registered in 2020 when Spanish authorities ordered a lockdown of the economy to contain the coronavirus outbreak.
This is the “result of the direct aid and measures put in place to respond to the health, economic and social effects of COVID-19,” stressed Spain’s Finance Minister, Nadia Calviño.
The source: EURACTIV