EU: Government debt/GDP ratio rises to 89.8% in Q3

By Yunus Girgin

ANKARA (AA) - The government-debt-to-GDP ratio in the EU rose to 89.8% at the end of the third quarter of 2020, the EU statistical body said on Thursday.

Amid the impact of policy responses to COVID-19 containment measures, the ratio climbed from 87.7% in the previous quarter and 79.2% in the third quarter of 2019, according to Eurostat.

The figure in the eurozone – the 19 of the 27 EU members who use the euro – hit 97.3% in the third quarter of 2020, up from 95% in the previous quarter and 85.8% in the third quarter of 2019.

The increases are due to two factors – government debt increasing considerably and GDP decreasing, Eurostat said.

Countries with the highest general government-debt-to-GDP ratio in the bloc are Greece, Italy, and Portugal with 199.9%, 154.2%, and 130.8%, respectively.

They were followed by Southern Cyprus with 119.5% and France with 116.5%.

Five states posted a fall in quarter-on-quarter debt-to-GDP ratio, while 20 member states saw an increase.

The ratio remained stable in Estonia and the Netherlands.

“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,” Eurostat said.

The data showed that seasonally adjusted general government deficit-to-GDP ratio fell to 5.8% in the 19-member eurozone and to 5.6% in the EU27, which includes all EU members.

“The deficit-to-GDP ratio decreased due to GDP growth, higher revenue and lower expenditure. In the third quarter of 2020, all member states continued to record a government deficit,” Eurostat added.

Total government expenditures in the euro area were 52.1% of GDP during the same period, down from 59.6% in the previous quarter.

The figure was 51.6% in the EU, down from 59% in the second quarter of 2020.