MADRID - Spain's public debt rose above 100 percent in the first quarter to its highest level in 20 years, the central bank said Wednesday as Madrid faces an EU sanctions threat for public overspending.
Spanish Prime Minister Mariano Rajoy has promised tax cuts as the country prepares to go to the polls
Debt as a proportion of economic output hit 100.5 percent in the first quarter up from 99.2 percent at the end of 2015, the bank said in a statement.
It had already surpassed the symbolic 100-percent mark in the first quarter of 2015, when it hit 100.2 percent.
Spain's public debt stood at 1.09 trillion euros ($1.23 trillion) at the end of March.
The debt, as well as Spain's public deficit, are contentious issues as general elections approach at the end of the month, particularly after acting Prime Minister Mariano Rajoy promised tax cuts.
His conservative government has promised to bring the public debt down to 99.1 percent of economic output by the end of 2016 and reduce the public deficit to 3.6 percent.
Despite the return to growth Spain's public deficit came in at 5.0 percent of gross domestic product (GDP) last year, far higher than the target of 4.2 percent Madrid agreed with Brussels.
The European Union has set a public deficit limit of 3.0 percent of GDP and debt limit of 60 percent of economic output.
Austerity-weary Spain has overshot its fiscal targets repeatedly, making it one of the worst performers in the eurozone.
The European Commission, the bloc's executive arm, will decide in the coming months whether to slap sanctions on Spain for public overspending -- an unprecedented step if it happens.
Spain goes to the polls on June 26 for the second time in six months after bickering parties failed to reach an agreement on a coalition government following inconclusive polls in December.
The country in 2014 posted its first full-year of growth since a 2008 property crash which put millions of people out of work and pushed the country to the brink of a bailout, with an expansion of 1.4 percent.
It now is one of the EU's fastest-growing economies, growing 3.2 percent last year.