The Spanish Public Treasury begins debt auctions with optimism in 2025.

The Public Treasury has announced the start of a new cycle of debt auctions for 2025, with a schedule that promises to be key in the Spanish economic landscape. The first of these auctions will take place on January 14, with the issuance of three-month and nine-month Treasury bills, followed by a second auction scheduled for January 16, which will include government bonds and obligations. This beginning of the year marks an important moment for public financing, especially after the close of 2024, which saw a significant reduction in net debt issuance. In the last month of the previous year, the Treasury managed to place 2.582 billion euros in Treasury bills while adjusting interest rates to levels not seen in the last two years for some of the securities. This strategy has been well received in the markets, as it reflects a context of reduced pressure on public debt as the Spanish economy shows signs of recovery and stability. The reduction in net debt issuance, which stood at 55 billion euros in 2024, is indicative of the Government's commitment to fiscal responsibility, as stated by the Ministry of Economy, Trade and Industry. The evolution of gross debt issuance is also noteworthy. In 2024, it reached 259.341 billion euros, compared to 251.995 billion the previous year. This slight increase in terms of gross issuance contrasts with the decrease in financing needs, which in turn contributes to the reduction of the projected deficit for this year. According to projections, the debt-to-GDP ratio is expected to drop to 102.5%, which would represent a significant advance from the 105.1% recorded in 2023. One of the positive aspects of debt management in Spain is the extension of its average life, which remains close to eight years. This characteristic is fundamental for stabilizing the interest burden relative to GDP and, therefore, for reinforcing the sustainability of public debt. A figure that underscores good economic management is the average cost of debt, which has been set at 2.21%, just twelve basis points higher than at the end of 2023. Another point to highlight is the downward trend in the average cost of new debt issued, which has decreased to 3.16%, representing an improvement of 28 basis points compared to the previous year. This reduction in costs is a positive signal for investors and the market in general, which could encourage greater participation in debt auctions. Regarding the profile of investors, data reflects that international investors have maintained a predominant role, acquiring 43.6% of bonds and obligations in 2024. This increase of 2.2 percentage points compared to 2023 is a sign of confidence in the Spanish economy and its capacity to manage its debt effectively. Over the past two years, international investors have increased their holdings of Spanish debt by more than 134 billion euros, highlighting the attractiveness of these assets in the global context. In summary, the year 2025 begins with optimistic expectations for the Spanish Public Treasury, which is facing an environment of reduced financing needs and more efficient debt management. The auctions scheduled for this month will be an important barometer for assessing market confidence and investor response to this new phase. With a clear commitment to responsible fiscal management and deficit reduction, Spain is positioning itself to tackle the economic challenges on the horizon. Attention will now turn to how the markets will respond to these auctions and whether they will continue to show the same interest in Spanish debt that they have demonstrated in recent years. The success of these issuances will be crucial to consolidating economic recovery and ensuring the country's financial stability in an increasingly uncertain world.