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Cyprus government debt fell at end of Q4 2022

24/04/2023 09:50

At the end of the fourth quarter of 2022, the general government gross debt to GDP ratio in Cyprus stood at 86.5%, compared with 91.3% at the end of the third quarter of 2022, according to data released by Eurostat, the statistical service of the European Union.

This ratio stood at 91.6% in the euro area at the end of the fourth quarter, compared with 93.0% at the end of the third quarter. In the EU, the ratio also decreased from 85.1% to 84.0%.

For both the euro area (EA19) and the EU, the decrease in government debt to GDP ratio is due to an increase in GDP outweighing the increase in government debt in absolute terms.

Compared with the fourth quarter of 2021, the government debt to GDP ratio also decreased in Cyprus (from 101.2% to 86.5%), the euro area (from 95.5% to 91.6%), and the EU (from 88.0% to 84.0%).

At the end of the fourth quarter of 2022, debt securities accounted for 82.5% of euro area and for 81.9% of EU general government debt. Loans made up 14.5% and 15.1% respectively and currency and deposits represented 3.0% of euro area and 2.9% of EU government debt.

Data on the composition of general government debt on the member state level are only recorded as ratios compared to the GDP. In Cyprus, currency and deposits represented 0.6% of GDP (compared to 2.7% in the eurozone and 2.5% in the EU), debt securities represented 54.0% (compared to 75.6% and 68.8%) and loans represented 32.0% (compared to 13.3% and 12.7%).

Due to the involvement of EU Member States' governments in lending to certain Member States, quarterly data on intergovernmental lending (IGL) are also published. The share of IGL as percentage of GDP at the end of the fourth quarter of 2022 accounted for 1.6% in the euro area and for 1.4% in the EU. This share stood at 1.2% for Cyprus.

The highest ratios of government debt to GDP at the end of the fourth quarter of 2022 were recorded in Greece (171.3%), Italy (144.4%), Portugal (113.9%), Spain (113.2%), France (111.6%) and Belgium (105.1%), and the lowest in Estonia (18.4%), Bulgaria (22.9%) and Luxembourg (24.6%).

Compared with the third quarter of 2022, seven Member States registered an increase in their debt to GDP ratio at the end of the fourth quarter of 2022 and nineteen a decrease, while the ratio remained stable in Luxembourg.

The largest increases in the ratio were observed in Estonia (+2.5 percentage points – pp), the Netherlands (+2.0 pp), Lithuania and Finland (both +1.1 pp), while the largest decreases were recorded in Portugal (-5.9 pp), Cyprus (-4.8 pp), Greece (-4.5 pp), Ireland (-4.4 pp) and Austria (-3.0 pp).

Compared with the fourth quarter of 2021, four Member States registered an increase in their debt to GDP ratio at the end of the fourth quarter of 2022 and twenty three Member States a decrease.

The increases in the ratio were recorded in Czechia (+2.1 pp), Estonia (+0.8 pp), Finland (+0.4 pp) and Luxembourg (+0.1 pp), while the largest decreases were observed in Greece (-23.3 pp), Cyprus (-14.7 pp), Portugal (-11.5 pp), Ireland (-10.7 pp), Croatia (-10.0 pp), Denmark (-6.6 pp), Italy (-5.5 pp), Lithuania (-5.3 pp), and Spain (-5.0 pp).