Households and businesses in Spain have reduced their debt to levels not seen since the beginning of the century. This is the main conclusion from the financial accounts of the Spanish economy the Bank of Spain published on Thursday.

Household debt in the first quarter of 2026 stood at 42.5% of GDP, the lowest level since 1999. For businesses, debt reached 62.5%, the lowest level since 2001.

The explanation lies in the dynamism of the Spanish economy: despite the historic lows in terms relative to GDP, consolidated household debt grew to 728 billion euros compared to 700 billion in the same period of 2025 and, in the case of companies, it went from 1.049 to 1.070 trillion euros.

Inflation is also taking its toll on households and businesses, which have significantly increased their investment in cash, deposits and fund shares, according to the Bank of Spain. In cumulative terms over four quarters, consolidated acquisitions of financial assets by companies reached 5% of GDP (86 billion), above the average of 4.4% since 2022.

For households, these reached 5.8% (100 billion), compared to an average of 3.6% since 2022. "This increase is mainly due to greater investment in cash, deposits, and investment fund shares," the Bank of Spain said.

The central bank anticipates a slight increase in household holdings in equity and investment funds, offset by a decline in cash and deposits. The net financial wealth of Spanish households and non-profit institutions serving households (NPISHs) reached 2.7 trillion in the first quarter of 2026, representing a 9.3% year-on-year increase.

As a percentage of GDP, net financial wealth, which is obtained by deducting liabilities from financial assets, stood at 155.3% of GDP at the end of March, an increase compared to the 150.7% reached in the first quarter of 2025.

"The increase in net worth is mainly explained by the revaluation of assets, especially equity holdings and investment funds," the Bank of Spain stated.

As household investment increased, so did lending, which reached 1.9% of GDP, compared to 0.3% in recent quarters. Consequently, net lending reached 2.7% of GDP, compared to an average of 0.7% since 2022.

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