Spain will borrow 25% less than expected this year

The Spanish Government will dispense with the last issuance of bonds and obligations of the state scheduled for next December 16, which will place the net debt issuance in 2021 in 75,000 million euros, 25% less than expected at the beginning of the year. As explained by the First Vice President and Minister of Economy, Nadia Calvin, the forecast of the net issuance needs for 2022 will also be around 75,000 million, which, in his opinion, will allow the Spanish authorities to reinforce the “responsible and prudent fiscal position that we have been developing from the Government of Spain & rdquor ; and “that good tone and the momentum for the acceleration of the economic recovery shown by the & rdquor; indicators, has indicated upon arrival at the Eurogroup meeting which takes place this Monday in Brussels.

To the cancellation of 20,000 million already announced last July by the Treasury, there are now another 5,000 million euros that increase the volume of net financing that the Government will dispense with. 25,000 million mentioned. With this decision, the issuance of gross debt in Spain – with an average cost of the debt issued in the year for the first time in negative, -0.02% – will fall this year to 264,174 million euros. According to the Ministry of Economy, this cut will allow to continue reducing the burden of interests of the State and Public Administrations, both in absolute terms of cash and in relation to GDP and public income.

According to Economy, the good evolution of tax revenues -with a higher collection than expected-, low interest rates and the imminent disbursement of 10,000 million on account of European funds are the causes that allow reducing the volume of financing required for this anus.

One more element in a recovery path plagued by uncertainties, mainly due to the emergence of the Omicron variant. Still, the government’s diagnosis remains cautiously positive. “In the case of Spain we see it is that the year 2021 is going from less to more, that an acceleration of economic growth is taking place in the second part of the year and that the prospects are positive in the coming months and in the whole of 2022 and 2023. Fortunately, Spain has high levels of vaccination and we have a more positive outlook for the moment in these new circumstances and with regard to the possible impact of the pandemic & rdquor ;, Calviño has assessed.

Growth review

Even so, the vice president admits that “we are in a moment of considerable uncertainty & rdquor; so he acknowledges that no one should be surprised “that there are constant upward and downward revisions & rdquor; of the economic forecasts of the different organizations, although for now there is no plan to revise the Government’s figures downwards as the OECD has done recently.

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“The important thing is to see where the pulse of economic reality is. The data we have on the labor market and tax revenues, which are 3% above the collection we had before the pandemic hit us. All these data indicate a positive evaluation of the Spanish economy, an evolution that goes from less to more in the course of 2021 and a positive outlook for the coming years & rdquor ;, he insisted before a Eurogroup focused on fiscal policy and plans Member States’ budgets for 2022.

On the table, therefore, will also be a Spanish plan that received a few days ago the approval of the European Commission. “It is considered that the orientation of the general budget project for 2022 will allow the economic recovery and job creation to continue to be promoted in a way that is compatible with the continuation of the reduction of the deficit and public debt ratios over GDP, taking advantage of the so much economic growth to improve our fiscal balances & rdquor ;, Calviño explained.