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Spain's 2012 Public Debt Advances 20%

Source: Bloomberg - Sun 17th Mar 2013
Spain's 2012 Public Debt Advances 20%

Spain's public sector debt surged 20% last year as the government sought EU aid for its banks and backstopped the nation's municipalities as well as its tax-funded pensions and jobless-benefit systems.

Borrowings rose to 884.4 billion at the end of December from 736.5 billion a year earlier, according to the Madrid-based central bank's estimate. That represents 84.1% of GDP, up from 69.3% a year earlier and 77.3% in Q3. It is less than the European Commission's forecast of 88.4%.

Spain's debt load will beat the euro-area average for the first time in the currency's history this year and top 100% of output in 2014, the commission says. Rated one to two steps above junk by three rating companies amid a 6th year of slump, the region's 4th-largest economy has so far avoided a full bailout, helped by ECB support.

The central government accounted for most of the debt, while the 17 semi-autonomous regions generated 185 billion, up 11% from the previous quarter. Spain's more than 8,000 town halls' debt was 42 billion and the state's Social Security welfare system 17.2 billion, data released on the Bank of Spain's website showed.

The yield on Spain's 10-year benchmark bonds was unchanged at 4.87% on Saturday morning in Madrid, compared with a euro- era high of 7.75% in July, before the ECB stepped in to backstop the euro.