Spain's public debt hits new record

Public debt levels in Spain have reached a new high as the eurozone member battles the effects of a lingering recession. With the economic outlook bleak, Standard & Poor's left the country's debt rating unchanged. Spanish public debt hit nearly 923 billion euros ($1.23 trillion) in the first quarter of 2013, the Bank of Spain reported Friday. The figure amounted to 88.2 percent of gross domestic product (GDP), up 19.1 percent from the same period a year earlier. The government said it expected the debt burden to rise even further to 90.5 percent of GDP at the end of the year with the nation still firmly in the grip of a recession which has lasted some four years. The central bank noted that regional debt grew the fastest to nearly 190 billion euros, with Catalonia being the most-indebted among Spain's 17 semi-autonomous regions. Unfavorable frame conditions Also on Friday, ratings agency Standard & Poor's reaffirmed the nation's credit rating standing at BBB-, just one notch above junk status. The agency warned that the long-term outlook was negative. S&P cited weak investment in Spain, high borrowing costs faced by companies and demographic changes as factors undermining the country's medium-term growth potential. Prime Minister Mariano Rajoy's government is struggling to reduce a budget deficit that amounted to almost 7 percent last year. The European Union expects the country's economy to contract by another 1.5 percent in 2013. Unemployment in Spain currently stands at roughly 27 percent.