Spain Raises Debt Ceiling to Propel Economic Recovery

Spain plans to issue 60 billion euros in net debt for 2025, an increase from 55 billion euros in 2024. Gross debt issuance will rise to 278 billion euros, reflecting the country's response to recent floods. Spain's debt-to-GDP ratio is projected to decrease to 101.4% by 2025.

Spain is gearing up to increase its net debt issuance to 60 billion euros for 2025, as announced by Economy Minister Carlos Cuerpo this Tuesday. This marks a rise from the 55 billion euros issued in 2024, showcasing the country's financial strategy amidst evolving challenges.

The gross debt issuance for the upcoming year is also expected to surge to 278 billion euros, compared to last year's 257 billion euros, equivalent to 17% of Spain's GDP. The government emphasizes the need for flexibility to adequately address reconstruction efforts following catastrophic floods in the country's southeast, which claimed 224 lives in October.

In terms of economic metrics, the debt-to-GDP ratio is anticipated to drop slightly to 101.4% by the end of 2025, from 102.5% at the end of 2024. Cuerpo underscored that Spain's GDP remained robust in late 2024, surpassing growth rates of other major EU economies, with an overall growth estimate of 2.7% for 2024 and an optimistic forecast of 2.5% for 2025.

(With inputs from agencies.)