MADRID: Spain’s public debt soared in the second quarter to its highest level in at least 20 years as government spending leapt in response to the coronavirus pandemic.
The government announced that it would have to suspend fiscal rules, which EU-member states must normally meet, in 2020 and 2021 as a result of the pandemic’s impact on the economy.
“The government has decided to suspend budgetary rules in an extraordinary fashion for 2020 and 2021’’, Finance Minister Maria Jesus Montero said.
Montero insisted however that Spain would maintain a “fiscally responsible” approach overall as figures showed the national debt ballooning to around 110 per cent of gross domestic product (GDP) in the second quarter, way above the EU limit of 60 per cent.
data from the Bank of Spain put total debt at 1.29 trillion euros ($1.5 trillion), up from 1.22 trillion or about 99 per cent of GDP in the first three months of the year.
For much of the second quarter, Spain was in lockdown with the economy in “hibernation” to fight the spread of the virus. — AFP
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