Eurozone Public Debt Rises to 88.1% of GDP in Q2 2024, Cyprus Leads in Debt Reduction

According to data released by Eurostat, public debt in the eurozone reached 88.1% of GDP in the second quarter of 2024, up slightly from 87.8% at the end of the first quarter, but maintaining the same level compared to the corresponding period in 2023. In comparison, the EU-wide ratio of general government gross debt to GDP stood at 81.5%, rising marginally from 81.3% in the previous quarter.

Compared to the second quarter of 2023, both the euro area and the EU experienced a slight reduction in their public debt-to-GDP ratios. The eurozone saw a decrease from 88.8% to 88.1%, while the EU saw a drop from 81.9% to 81.5%. As of the second quarter of 2024, the composition of general government debt in the euro area consisted of 84.0% debt securities, 13.4% loans, and 2.5% currency and deposits. In the broader EU, debt securities made up 83.6% of total debt, loans 13.9%, and currency and deposits also 2.5%.

Cyprus: The Eurozone Debt Reduction Champion

Cyprus emerged as the "European Champion" in public debt reduction. At the end of the second quarter of 2024, Cyprus' public debt stood at 70.5% of GDP, representing the largest reduction in the government debt-to-GDP ratio among all EU countries. Cyprus recorded a notable decrease of 2.1 percentage points (p.p.) compared to the first quarter of 2024 and a remarkable 10.0 p.p. reduction in comparison to the second quarter of 2023.

Highest Debt Ratios in Greece and Italy, Lowest in Bulgaria

Among EU member states, the highest public debt-to-GDP ratios at the end of the second quarter of 2024 were recorded in Greece (163.6%), Italy (137.0%), France (112.2%), Belgium (108.0%), Spain (105.3%), and Portugal (100.6%). Conversely, the countries with the lowest public debt ratios were Bulgaria (22.1%), Estonia (23.8%), and Luxembourg (26.8%).

Quarterly Changes in Debt-to-GDP Ratios

Compared to the first quarter of 2024, nine member states experienced an increase in their debt-to-GDP ratios at the end of the second quarter, while seventeen recorded a decrease, and Denmark's ratio remained unchanged.

The largest increases in debt-to-GDP ratios were seen in Finland (+2.0 p.p.), Austria and Italy (both +1.8 p.p.), France (+1.6 p.p.), Portugal (+1.2 p.p.), Poland (+0.9 p.p.), and Sweden (+0.6 p.p.). On the other hand, the most significant decreases were noted in Cyprus (-2.1 p.p.), Croatia (-2.0 p.p.), Greece (-1.8 p.p.), Lithuania (-1.7 p.p.), Spain (-0.9 p.p.), the Czech Republic (-0.8 p.p.), and both the Netherlands and Germany (-0.7 p.p.), while Romania saw a decrease of -0.6 p.p.

Year-Over-Year Debt Developments

Over the year leading up to the second quarter of 2024, thirteen member states recorded an increase in their debt-to-GDP ratios, while thirteen saw a decrease. The ratio remained stable in the Czech Republic during this period.

Finland saw the largest year-over-year increase in its debt-to-GDP ratio, climbing by 5.2 p.p., followed by Estonia (+4.7 p.p.), Latvia and Poland (both +4.1 p.p.), Austria (+3.1 p.p.), Belgium (+2.3 p.p.), Romania (+2.2 p.p.), and Slovakia (+1.0 p.p.).

Conversely, Cyprus recorded the largest year-over-year decrease, with a drop of 10.0 p.p., followed by Greece (-8.9 p.p.), Portugal (-8.1 p.p.), Croatia (-5.7 p.p.), Spain (-3.5 p.p.), the Netherlands (-2.2 p.p.), Germany (-1.7 p.p.), and Luxembourg (-1.3 p.p.).

Deficit Levels Remain Stable

As for the general government deficit in relation to GDP, it stood at 3.0% in the euro area and 3.1% in the EU for the second quarter of 2024. While the eurozone’s deficit-to-GDP ratio remained unchanged from the first quarter of 2024, the EU’s ratio rose slightly from 2.9% in the previous quarter.

In terms of revenue, total government revenue in the euro area amounted to 46.2% of GDP in the second quarter, up from 45.8% in the first quarter of 2024. This increase was driven by a rise in seasonally adjusted total government revenue, as well as a growth in nominal GDP.

Rising Government Spending

Government spending also rose in both the euro area and the EU during the second quarter of 2024. Total government expenditure in the euro area amounted to 49.2% of GDP, up from 48.8% in the first quarter, with seasonally adjusted total spending increasing by approximately €25 billion.

In the EU, total government revenue reached 45.7% of GDP in the second quarter, up slightly from 45.6% in the previous quarter. Seasonally adjusted total revenue in the EU grew by around €22 billion. Government spending in the EU amounted to 48.9% of GDP, compared to 48.5% in the previous quarter, with total seasonally adjusted spending rising by approximately €34 billion.

This data provides a comprehensive snapshot of public debt trends and fiscal developments across the eurozone and the EU in the second quarter of 2024, highlighting varying patterns in debt management and government spending across member states.

By fLEXI tEAM