ARCHIVED - Murcia Region has the highest debt to GDP ratio in Spain
In contrast, Spain has managed to reduce its overall deficit by 70% so far this year
The Region of Murcia continues to be the Spanish community with the largest debt to Gross Domestic Product (GDP) ratio, according to the latest figures published on Friday December 2 by the Ministry of Finance.
In Murcia, the deficit has reached 1.79%, which represents 626 million euros; this is an enormous increase compared to this time last year, when the Region’s debt stood at just 0.38% of GDP, or 123 million.
A ratio increase of this magnitude is never good news for a community, or indeed a country, as investors typically look at this figure to measure its ability to repay debt. This, in turn, affects the country’s borrowing costs and government bond yields.
Spain as a whole, though, is performing much better, reducing its deficit by a whopping 70% in the first ten months of the year. However, debt still represents 1.37% of the nation’s GDP, which translates into 18.016 billion euros.
But to put things into perspective, the deficit skyrocketed to 59.468 billion in October 2021, and the reduction can be largely attributed to the increase in non-financial income of 25.9% compared to the much slower growth of expenses (1.8%).
Despite the reduction in the deficit of Spain as a whole, the financial behaviour of the regions has flipped: compared to a surplus in October 2021 of 8.323 million euros, this October the deficit reached 5.879 million, 0.45% of GDP.
Another figure which is usually ‘in the red’ is Social Security, but this has also reduced substantially this year, thanks in large part to a 3.3% growth in income across Spain, while claimed expenses have fallen by 1.1%.
In other news: Águilas gets brand new Mercadona
Image: Pixabay
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