Spain Cuts Bond-Issuance Goal to EU51 Billion, Guindos Says

The Spanish government reduced its forecast for new public borrowing in 2015 for a second time in less than two months, as economic growth accelerates, Economy Minister Luis de Guindos said.

The nation’s Treasury will sell a net 51 billion euros ($57 billion) in debt this year, after previously revising its target down to 53 billion euros in July from 55 billion euros at the start of the year. The government forecasts the economy growing 3.3 percent this year, more than twice the average for the 19-nation currency bloc.

“The net issuance target has been reduced from 55 to 51 billion euros,” de Guindos told Bloomberg in Madrid. “That is the new target in line with the evolution of the fiscal deficit.”

Net issuance is the sovereign debt created in addition to that which merely refinances maturing securities.

Lower fuel prices and interest rates close to record lows are helping to spur economic growth and bolster tax revenue for the Spanish government. That has reduced its financing needs from bond markets.

Spain’s government debt, which was little changed during most of Wednesday, rose in the last hour of trading. The 10-year bond yield closed down two basis points, or 0.02 percentage point, at 2.13 percent.

Debt as a proportion of gross domestic product is set to fall to 98.2 percent at the end of 2016 from 98.7 percent at the end of this year, according to the government’s estimates presented in its budget plan.

Spain has covered 73 percent of its medium- and long-term financing needs for this year, with an average issuance cost of 0.9 percent at the end of July.

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