Public Debt to GDP in the Euro Area and the European Union
The public debt burden relative to GDP in the euro area stood at 95.6 percent in the first quarter of 2022. This figure marks a drop of one tenth of a percentage point from the previous quarter and represents the lowest debt-to-GDP level since the second quarter of 2020, as published by Eurostat. The decline reflects a stronger GDP performance during that period, which outpaced the growth in debt when measured against the national output across member countries.
Across the European Union as a whole, the debt-to-GDP ratio reached 87.8 percent at the end of the first quarter, down from 88.1 percent at the end of 2021. This stands as the EU’s lowest debt ratio since the second quarter of 2020, when the figure was 87.5 percent. The improvement in the ratio is attributed to an expansion in GDP that outweighed the increase in absolute debt across the union during the same interval.
Despite the smaller headline ratios, the total debt in both the euro area and the EU rose in absolute terms. In the euro area, the debt stock increased by 240 billion euros over the year and by 554 billion euros over the twelve-month period, reaching 11.976 trillion euros. In the European Union, debt climbed by 235 billion euros year over year and by 583 billion euros year over year, bringing the total to 12.992 trillion euros. These increases reflect ongoing recovery dynamics and the financing needs associated with economic revival in the aftermath of the pandemic period.
Eurostat explained that for both the euro area and the EU, the small decline in the debt-to-GDP ratio results from GDP growth surpassing the pace of debt accumulation in absolute terms. As economies recovered, output rose more quickly relative to the amount of debt outstanding, contributing to the observed easing in the headline ratios. The analysis highlights how different economies within the bloc contributed to the overall trend as sovereigns continued to support growth and stability through fiscal measures.
At the end of the first quarter, the country dispersion of debt-to-GDP ratios showed a wide gap between the highest and the lowest levels. Greece posted the highest ratio at 189.3 percent, followed by Italy at 152.6 percent and Portugal at 127 percent. Spain registered 117.7 percent, France 114.4 percent, Belgium 107.9 percent, and Cyprus 104.9 percent. On the other end of the spectrum, Estonia recorded 17.6 percent, Luxembourg 22.3 percent, and Bulgaria 22.9 percent. These figures illustrate the varied fiscal trajectories across EU member states and underscore the ongoing challenge for the bloc to balance debt sustainability with growth incentives across diverse economies.