Spain's public debt has seen a significant increase of 4.8% in nominal terms, reaching €1.699 trillion in 2025, which is the highest annual figure recorded. Despite this nominal growth, the debt-to-GDP ratio has decreased slightly from 101.7% to 100.8%, according to data released by the Bank of Spain. This presents a mixed picture of the Spanish economy where the nominal levels of debt are high, but the relative burden compared to economic output is diminishing.

The Spanish government regularly needs to issue public debt to manage its finances since its revenue from taxes is not sufficient to cover public spending. This annual deficit forces the government to borrow funds to bridge the financial gap, highlighting the ongoing challenges in managing budgetary constraints and ensuring fiscal sustainability. In 2025, the total increase in debt was €78.108 billion, with year-end debt total reaching €1.698 trillion, although it still remained below the record monthly debt of €1.709 trillion noted in September.

This situation reflects broader economic implications, including the reliance on debt issuance for economic stability and funding public expenditures. The growth of public debt and the corresponding management strategies will be closely watched as it can impact Spain's credit ratings, investor confidence, and overall economic health moving forward, especially in light of potential global economic pressures and recovery efforts post-pandemic.