21/01/2021 14:17
At the end of the third quarter of 2020 government debt to GDP ratio in the euro area stood at 97.3%, compared with 95.0% at the end of the second quarter of 2020. In the EU, the ratio increased from 87.7% to 89.8%, according to data released by Eurostat, the statistical office of the European Union.
Compared with the third quarter of 2019, the government debt to GDP ratio rose in both the euro area (from 85.8% to 97.3%) and the EU (from 79.2% to 89.8%): the increases are due to two factors - government debt increasing considerably, and GDP decreasing. At the end of the third quarter of 2020, debt securities accounted for 82.3% of euro area and for 82.1% of EU general government debt. Loans made up 14.5% and 14.8% respectively and currency and deposits represented 3.3% of euro area and 3.1% 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) are also published. The share of IGL as percentage of GDP at the end of the third quarter of 2020 amounted to 2.0% in the euro area and to 1.7% in the EU. These data are released by Eurostat, the statistical office of the European Union.
The highest ratios of government debt to GDP at the end of the third quarter of 2020 were recorded in Greece (199.9%), Italy (154.2%), Portugal (130.8%), Cyprus (119.5%), France (116.5%), Spain (114.1%) and Belgium (113.2%), and the lowest in Estonia (18.5%), Bulgaria (25.3%) and Luxembourg (26.1%).
Compared with the second quarter of 2020, twenty Member States registered an increase in their debt to GDP ratio at the end of the third quarter of 2020 and five a decrease, while the ratio remained stable in Estonia and the Netherlands. The largest increases in the ratio were observed in Greece (+8.5 percentage points – pp), Cyprus (+6.2 pp), Italy (+4.9 pp), Portugal (+4.8 pp), Lithuania (+4.6 pp) and Bulgaria (+4.0 pp). The decreases were recorded in Austria (-3.4 pp), Finland (-1.7 pp), Czechia (-1.5 pp), Belgium (-0.9 pp) and Ireland (-0.7 pp).
Compared with the third quarter of 2019, all Member States registered an increase in their debt to GDP ratio at the end of the third quarter of 2020. The largest increases in the ratio were recorded in Cyprus (+22.9 pp), Italy (+17.4 pp), Greece (+17.3 pp), Spain (+16.6 pp) and France (+16.5 pp).
Meanwhile, in the third quarter of 2020, the seasonally adjusted general government deficit to GDP ratio stood at 5.8% in the euro area and 5.6% in the EU.
In the third quarter of 2020, total government revenue in the euro area amounted to 46.2% of GDP, compared with 47.7% of GDP in the second quarter of 2020. This decrease as a percentage of GDP is due to stronger relative increase in GDP than the increase in total revenue – seasonally adjusted total revenue in the euro area increased by around €99 billion compared with the second quarter of 2020.
Total government expenditure in the euro area stood at 52.1% of GDP, a significant decrease in the ratio compared with 59.6% in the previous quarter.
Seasonally adjusted total government expenditure decreased by around €41 billion compared with the second quarter of 2020, mainly due to a lesser impact of policy measures to mitigate the economic and social impact of the COVID-19 pandemic. In the EU, total government revenue was 46.0% of GDP in the third quarter of 2020, a decrease compared to 47.4% of GDP in the second quarter of 2020. Total government expenditure in the EU was 51.6% of GDP, a decrease compared with 59.0% of GDP in the previous quarter.