In the second quarter of 2024, Cyprus achieved a significant reduction in its government debt, with the debt-to-GDP ratio falling to 70.5%. This contrasts with the eurozone’s average of 88.1% and the European Union’s (EU) overall ratio of 81.5%, according to Eurostat data released on Tuesday.
Cyprus experienced the most notable decrease in its government debt-to-GDP ratio compared to both the first quarter of 2024 (down by 2.1 percentage points) and the second quarter of 2023 (down by 10 percentage points). This marks a considerable improvement in the country’s fiscal position.
In comparison, the eurozone saw a slight increase in its debt ratio, from 87.8% in the first quarter to 88.1% in Q2 of 2024. The EU also experienced a minor rise, from 81.3% to 81.5% over the same period.
Year-on-year, the government debt-to-GDP ratio decreased slightly in both the eurozone (from 88.8% to 88.1%) and the EU (from 81.9% to 81.5%).
As of the end of the second quarter of 2024, debt securities made up the majority of government debt—84% in the eurozone and 83.6% in the EU. Loans accounted for 13.4% of the debt in the eurozone and 13.9% in the EU, while currency and deposits represented 2.5% in both regions.
Data on intergovernmental lending (IGL), related to loans between EU member states, showed that IGL represented 1.5% of GDP in the eurozone and 1.3% in the EU by the end of Q2 2024.
Among EU countries, Greece had the highest government debt-to-GDP ratio at 163.6%, followed by Italy (137%), France (112.2%), Belgium (108%), Spain (105.3%), and Portugal (100.6%). On the other end of the spectrum, Bulgaria (22.1%), Estonia (23.8%), and Luxembourg (26.8%) recorded the lowest ratios.
Regarding quarterly changes, nine EU member states saw an increase in their debt-to-GDP ratio, 17 experienced a decrease, and Denmark’s ratio remained unchanged. The largest quarterly increases were observed in Finland (+2.0 percentage points), Austria and Italy (both +1.8 pp), France (+1.6 pp), and Portugal (+1.2 pp). Conversely, the largest decreases were noted in Cyprus (-2.1 pp), Croatia (-2.0 pp), and Greece (-1.8 pp).
When comparing year-on-year data, 13 EU member states saw an increase in their debt ratio, another 13 saw a decrease, while the Czech Republic remained stable. Cyprus led the way with the most substantial annual drop of 10 percentage points, followed by Greece (-8.9 pp), Portugal (-8.1 pp), and Croatia (-5.7 pp).
Source: stockwatch.com.cy