Spain's Public Debt Hits New Record in Third Quarter

Spain's public debt, which has risen unchecked for the past five years of economic crisis, hit a new record of 93.4 percent of gross domestic product in the third quarter, the Bank of Spain said Friday.

Spain's center-right government, which last month announced it would ease its austerity reforms over the coming two years since the economy appears to be emerging from recession, has set a year-end debt-to-GDP target of 94.2 percent.

It sees the debt-to-GDP ratio peaking at 101.13 percent in 2015 before easing slightly to 101.09 percent in 2016.

Under the terms of the European Union's Maastricht Treaty, member states are supposed to have public deficits of no more than three percent of GDP, and debt of no more than 60 percent.

Spain's debt ratio has soared from 40.2 percent of GDP in 2008 -- when the end of a decade-long property boom triggered an economic slump -- to 85.9 percent at the end of 2012.

The ratio stood at 79.1 percent during the third quarter of 2012.

Since his landslide election victory two years ago, Prime Minister Mariano Rajoy has pushed through unpopular spending cuts, tax rises and labor reforms in a bid to stabilize the public finances of the economy, the fourth-biggest in the eurozone.

But last month he announced his government would ease its austerity drive.

"I think we are now in a position to say that there will not be any cutbacks as big as the ones we have adopted over the past two years," he said in an interview on national radio to mark the midpoint of his mandate.

The latest official figures show Spain timidly emerged from a two-year recession in the third quarter of this year, but the unemployment rate remains extremely high at nearly 26 percent.