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Financials

Spanish public debt jumps above 100 percent of GDP in June

MADRID, Aug 17 (Reuters) - Spanish gross debt rose to a record high 1.1 trillion euros ($1.24 trillion) in June, Bank of Spain data showed on Wednesday, which the economy ministry said that was equivalent to 100.9 percent of national output, well above 2016 goals.

Spain is aiming for a debt to gross domestic product (GDP) ratio of 99.1 percent by the end of the year, after it ended 2015 at 99 percent.

The economy ministry said it a statement it was still on track to meet year-end targets, at a time when the European Commission is stepping up pressure on EU countries to do more to reduce high public and private debt levels.

“There are big seasonal variations that have to be taken into account,” the ministry said of June’s data. “Bearing this in mind ... the increase in public debt is still slowing, as had been happening since 2013.”

Public debt rose by 18.5 billion euros from May to June, the data from the Bank of Spain showed.

In spite of a political deadlock now in its eighth month, Spain’s economy is growing at one of the fastest rates in the euro zone, and the interim government recently hiked 2016 growth forecasts to 2.9 percent from 2.7 percent.

The caretaker administration of conservative Prime Minister Mariano Rajoy - which has governed in an acting capacity since an inconclusive December election - is relying on this strong growth cycle to help Spain meet its deficit reduction targets for this year too.

Rajoy is edging closer to a second term in office as he tries to win support from a smaller centrist rival, though Spain’s centre-left Socialist party has so far maintained its veto to another conservative government. ($1 = 0.8873 euros) (Reporting by Sarah White and Carlos Ruano Editing by Jeremy Gaunt)

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