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Spains public debt hits record trade deficit grows

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Spain’s public debt hit a new record in the first quarter of this year, reaching 96.8 percent of economic output, the central bank said on Friday.

The debt of the euro zone’s fourth-biggest economy is expected to top 100 percent next year, the bank added — far above the 60 percent limit set by EU authorities.

Spain kept its debt relatively low before a real estate crash in 2008, at 36.3 percent of gross domestic product in 2007, but it has since soared in a double recession that ended last year.

The public debt reached 93.9 percent of GDP by the end of 2013 and is expected to climb to 99.5 percent this year and 101.7 percent next year, according to government forecasts.

Financial concerns over Spain have calmed since the height of the crisis in 2012, however.

The interest rates demanded by investors to lend to Spain have eased, making officials confident it can refinance its debts.

The economy grew by 0.4 percent in the first quarter of this year.

The unemployment rate remains close to 26 percent, however. Millions of Spaniards were thrown out of work by the crisis.

Overall Spain’s public debt totalled a record 989.925 billion euros ($1.344 trillion) in the first quarter of 2014, up from 924.132 billion a year earlier, the bank said.

The budgets of Spain’s regional administrations accounted for nearly 22 percent of the country’s gross domestic product, up from 18.6 percent a year earlier.

The central government has ordered the regions to rein in their budgets so Spain can meet the overall deficit-cutting targets agreed with the European authorities.

Separately, the economy ministry said on Friday that Spain’s trade deficit had deepened by 31.2 percent in April compared to a year earlier, to a total 2.155 billion euros.

The government is counting partly on exports to pull Spain out of recession but economists warn that the lingering effects of the recession threaten to slow the recovery.

Friday’s figures showed a monthly decline in exports of 3.7 percent to 19.6 billion euros. Imports also fell but at a slower pace of 1.1. percent to 21.8 billion euros in April.

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