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Spain's record debt to keep climbing until 2015

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Spain's record debt to keep climbing until 2015
Spanish Prime Minister Mariano Rajoy: The Spanish Government says Spain's debt will first begin to ease in 2016. File photo: Cesar Photo
09:02 CEST+02:00
Spain's public debt, rising unchecked for the past five years of economic crisis, will peak at just over 101 percent of output in 2015, the government said on Thursday.

The country's ratio of debt to gross domestic product (GDP) will hit 101.13 percent in 2015 before easing to 101.09 percent in 2016, according to government documents sent to the European Commission which were published Thursday.

The government's budget for 2014 which was tabled last month forecasts the debt ratio will rise to 98.86 percent next year from an expected 94.2 percent at the end of 2013.

Under the terms of the European Union's Maastricht Treaty, member states are supposed to have public deficits of no more than three percent of GDP, and debt of no more than 60 percent.

Spain's debt ratio has soared from 40.2 percent of GDP in 2008 — when the end of a decade-long property boom triggered an economic slump — to 85.9 percent at the end of 2012.

Prime Minister Mariano Rajoy's conservative government, which has imposed several rounds of austerity to fix the state's accounts, predicts the deficit will fall to 4.2 percent of GDP in 2015 and down to 2.8 percent in 2016, according to the documents.

Madrid had already announced that it expects the deficit will end 2013 at 6.5 percent of GDP and fall to 5.8 percent of output in 2014.

The government forecasts that the Spanish economy, the euro zone's fourth biggest, has emerged this quarter from recession and will post growth of 0.7 percent next year.

It forecasts the economy will shrink by 1.3 percent overall this year.

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