Spain’s public debt fell below the symbolic threshold of 100% of gross domestic product in July, marking the first time since February 2020 — before the Covid-19 pandemic — that the ratio has dropped below that level, the Bank of Spain announced Thursday.
The total debt of all public administrations stood at 99.9% of GDP in July 2026, a decline of 2.4 percentage points compared with the same period a year earlier, the Madrid-based monetary institution said in a statement. In absolute terms, public debt reached 1.744 trillion euros in July.
Government Hits Target Ahead of Schedule
The government of Socialist Prime Minister Pedro Sánchez had set a goal of bringing the debt ratio below the 100% threshold before the end of the year. The latest figures indicate that objective has been met ahead of schedule.
The Covid-19 pandemic triggered a sharp surge in public spending in Spain from 2020 onward, with the debt ratio peaking at 124.2% of GDP in March 2021. Since then, the trend has been downward, supported by the strength of the Spanish economy, which has been driven by a tourism boom, household consumption, and foreign investment.
Economic Momentum Behind the Decline
Spain’s robust economic performance in recent years has provided the fiscal space needed to bring debt levels down. Key drivers include:
- Record tourism revenues that have bolstered national output
- Resilient household consumption sustaining domestic demand
- Sustained foreign investment reinforcing growth momentum
The milestone represents a significant turnaround for Spain’s public finances, which had been under considerable strain since the onset of the pandemic. The government’s ability to meet its debt-reduction target ahead of deadline underscores the broader recovery of the Spanish economy within the eurozone.
