Spain's public debt neared 100 per cent of economic output in 2015, according to data released by the Bank of Spain on Wednesday and preliminary data from the National Statistics Institute.

Public debt rose €2 billion to €1.070 trillion by the end of December last year, the Bank of Spain said.

Preliminary data published by INE in January showed Spanish GDP expanded 3.2 per cent in 2015 from the year before, rising to a nominal €1.074 trillion according to a Reuters calculation. Final GDP numbers are due on February 25th.

That would produce a debt-to-GDP ratio of 99.6 per cent at the end of 2015, up from 99.3 per cent at the end of the third quarter and from the government’s official forecast of 98.7 per cent. In 2014, the ratio was 99.3 per cent.

However, it was below a forecast sent to Brussels in October of 99.7 per cent.

“This is due to two factors - the reduction of the public deficit and economic growth,” acting economy minister Luis de Guindos told reporters.

Spain’s public finances have been under scrutiny since a property bubble burst in 2008, putting millions out of work, almost tripling public debt as a percentage of economic output and sending the budget deficit soaring to more than 10 per cent of GDP.

Investor concern over the country's high public deficit - one of the highest in Europe - came to a head in 2012 when bond yields rose to unsustainable levels, pushing Spain close to needing a sovereign bailout.

A pledge by European Central Bank president Mario Draghi at the time to do "whatever it takes" to protect the euro pulled Spain back from the brink and economic growth returned again mid-2013. The economy is expected to expand around 3 per cent this year.

However, the European Commission has told Madrid the next Spanish government must reduce its deficit this year in line with European Union rules. Those rules call for a debt-to-GDP ratio of 60 per cent and a deficit of 3 per cent of GDP, or less .

The government’s debt-to-GDP targets are 98.5 per cent for 2016, 96.5 per cent for 2017 and 93.2 per cent for 2018.

Reuters