Spain | Private debt, a situation better than in the past

Private debt among Spanish companies and households, according to the Bank of Spain’s Financial Accounts for the Spanish Economy, currently stands at 135% of GDP, in line with the eurozone (137%). While both economies now find themselves at a similar juncture, they have followed very different paths.

Key points

• Key points:
• Spain started from high levels of indebtedness, which peaked (at more than twice GDP) between 2009 and 2010. That marked the start of a gradual deleveraging of the Spanish economy; a process interrupted by the COVID-19 pandemic. Meanwhile, the eurozone has maintained a relatively stable path over the last ten years.
• Corporates (excluding financial corporations) have seen their debt levels fall from a high of 120% in 2010 to 75%, before climbing with the pandemic, to a current 78%, aligned with the eurozone.
• Spanish households debt currently stands at 58% of GDP (85% in 2010), slightly higher than before the pandemic, which was the lowest level of the last ten years following the deleveraging process that also affected households.
• We can find a heterogeneous picture across the eurozone, with Luxembourg, Cyprus and the Netherlands (private debt exceeding 200% of GDP), Belgium and Ireland making up the top five in private sector debt, followed by France, Portugal (both above 150%), Finland, Spain and Malta.
• Following the deleveraging process in Spain, albeit interrupted by COVID-19, and with more than two years having now passed since the outbreak of the pandemic, Spanish corporates and households face the rising interest rates environment with a stronger financial position overall.

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