Government debt to GDP ratio in the euro area stood at 86.3% at the end of the first quarter of 2020, compared with 84.1% at the end of the fourth quarter of 2019, according to data released today by Eurostat, the statistical service of the EU.
In the EU, the ratio increased from 77.7% to 79.5%. Compared with the first quarter 2019, the government debt to GDP ratio fell in both the euro area (from 86.4% to 86.3%) and the EU (from 80.0% to 79.5%).
Debt to GDP ratio in Cyprus was 103.1% in Q1 2019, dropped to 95.5% in Q4 2019 and increased to 97.7% in Q1 2020. In Greece the debt to GDP ratio was 182.0% in Q1 2019, dropped to 176.6% in Q4 2019 and increased at 176.7% in Q1 2020.
The impacts of the containment measures as well as policy responses to the containment measures are expected to materialise fully in increased financing needs only in the second quarter of 2020, Eurostat warns,
At the end of the first quarter of 2020, debt securities accounted for 80.9% of euro area and for 80.6% of EU general government debt. Loans made up 15.5% and 15.9% respectively and currency and deposits represented 3.5% of euro area and 3.4% of EU government debt. Due to the involvement of EU Member States` governments in financial assistance to certain Member States, quarterly data on intergovernmental lending (IGL) is also published. The share of IGL as percentage of GDP at the end of the first quarter of 2020 amounted to 1.9% in the euro area and to 1.6% in the EU.
The highest ratios of government debt to GDP at the end of the first quarter of 2020 were recorded in Greece (176.7%), Italy (137.6%), Portugal (120.0%), Belgium (104.4%) and France (101.2%) and the lowest in Estonia (8.9%), Bulgaria (20.3%) and Luxembourg (22.3%).
Compared with the fourth quarter of 2019, 24 Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2020 and three a decrease. The largest increases in the ratio were observed in Belgium (+5.7 percentage points – pp), Finland (+4.9 pp), Slovenia (+3.5 pp), Spain (+3.4 pp) and France (+3.1 pp). The largest decrease was recorded in Lithuania (-3.0 pp).
Compared with the first quarter 2019, ten Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2020 and sixteen a decrease, while in Slovakia the ratio remained stable. The largest increases in the ratio were recorded in Finland (+4.7 pp) and Romania (+3.6 pp), while the largest decreases were recorded in Ireland (-5.6 pp), Cyprus and Greece (both -5.3 pp) as well as Portugal (-3.4 pp).
Meanwhile in the first quarter of 2020 the seasonally adjusted general government deficit to GDP ratio stood at 2.2% in the euro area and 2.3% in the EU. This is a sharp increase in both areas in comparison with the fourth quarter of 2019 and the highest deficit recorded in the euro area since the second quarter of 2015.
In the first quarter of 2020, total government revenue in the euro area amounted to 47.0% of GDP, an increase compared with 46.4% of GDP in the fourth quarter of 2019. This increase as a percentage of GDP is due to stronger decreases in GDP than decreases in total revenue – seasonally adjusted total revenue in the euro area decreased by around €26 billion compared with the fourth quarter of 2019. Total government expenditure in the euro area stood at 49.2% of GDP, a significant increase compared with 47.1% in the previous quarter. Seasonally adjusted total government expenditure increased by around €16 billion compared with the fourth quarter of 2019. In the EU, total government revenue was 46.3% of GDP in the first quarter of 2020, an increase compared to 46.0% of GDP in the fourth quarter of 2019. Total government expenditure in the EU was 48.6% of GDP, an increase compared with 46.7% of GDP in the previous quarter. No data is reported on Cyprus and Greece.