Spanish public debt rose to 1.1 trillion EUR in July 2016, which is now larger than the economic production of the country. In June, the ratio of debt to gross domestic product (GDP) amounted to exactly 100.9%. The Iberian country is trying to decrease the debt to 99.1% from GDP at the level of end of 2015.
Spanish Ministry of Economy explained that still is able to achieve its target in the end of the year, at a time when the European Commission steps up pressure on EU countries to cut high public and private debt. Spain falls in the view of the European Commission because of excessive deficit. The EU criteria for stability provide debt ceiling of 60% of GDP, which currently met few members of the union.
Regardless of the political crisis, which lasts already for the eighth month, Spain’s economy is growing at one of the fastest rates in the Eurozone, but the interim government recently raised its forecast for growth for 2016 from 2.7% to 2.9%.
The temporary Prime Minister Mariano Rajoy is relying on this strong growth cycle to help Spain to meet its targets for deficit reduction this year. Rajoy is getting closer to a second mandate, trying to win support from smaller centrist rival.
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