level of private debt in Spain surges

 

Public debt in Spain increased by 6.8% reaching a total of 638.8 billion euros last year, exceeding the limit set by the EU's Stability Pact for the first time since 1999, the Bank of Spain reported earlier today.

The country's level of debt stood at 60.1% of gross domestic product - just nudging past the stability pact limit of 60% of GDP.

The central bank published the figurest as Spain continues in its attempts to restore international confidence in its economy.

However, Spain's main concern is not its public debt, but levels of private debt held by companies and households, which has increased to over 170% of GDP.

The default rate of debtors to Spanish financial institutions grew to 6.06% of all credits at the start of the year, up from 5.8 % in December 2010, according to provided by the central bank today.The figure passed the 6% mark for the first time since October 1995.

Spain's lenders held 110.7 billion euros of bad debt he start of 2011, an increase of 14 billion from the same period a year earlier.