Cyprus witnessed a significant increase in its government debt-to-GDP ratio at the end of the second quarter of 2023, rising by 2.2 percentage points from the previous quarter, to reach 85.3 per cent, according to a report released by Eurostat on Monday.

This was the highest debt-to-GDP increase among EU member states during this period of time.

At the same time, the report added, Cyprus saw an 8.1 percentage point reduction compared to the second quarter of 2022, the third most substantial decrease in the EU.

In the eurozone, this ratio slightly decreased to 90.3 per cent during the second quarter of 2023 compared to 90.7 per cent in the first quarter of the year.

Across the EU, this indicator declined to 83.1 per cent in the second quarter of the year, down from 83.4 per cent in the first quarter.

Both in the eurozone and the EU, the reduction in the public debt-to-GDP ratio is primarily attributed to the growth of the GDP in absolute numbers outpacing the increase in public debt.

In the second quarter of 2023, Cyprus had the highest increase in the government debt-to-GDP ratio, with notable rises in Slovakia, Italy, Finland, and Estonia, among others.

Conversely, decreases were observed in Latvia, Croatia, Portugal, Greece, Malta, Austria, Slovenia, the Netherlands, Germany, and Sweden.

Among EU member states, Greece reported the highest government debt-to-GDP ratio during the second quarter of 2023 at 166.5 per cent. It was followed by Italy (142.4 per cent), France (111.9 per cent), Spain (111.2 per cent), Portugal (110.1 per cent), and Belgium (106.0 per cent).

Estonia recorded the lowest ratio at 18.5 per cent, followed by Bulgaria (21.5 per cent), Luxembourg (28.2 per cent), Denmark (30.2 per cent), and Sweden (30.7 per cent).

Compared to the first quarter of 2023, the debt-to-GDP ratio increased in nine EU member states and decreased in 18.

Cyprus saw the second-highest increase, while the most substantial declines were registered in Greece, Portugal, Cyprus, Ireland, Croatia, Slovenia, Austria, Italy, Spain, and the Netherlands.

By the end of the second quarter of 2023, debt securities represented 83.4 per cent of the debt in the eurozone and 82.9 per cent in the EU.

Loans accounted for 13.8 per cent in the eurozone and 14.3 per cent in the EU, while currency and deposits represented 2.8 per cent in the eurozone and 2.7 per cent in the EU.

Due to the participation of EU member states’ governments in lending to certain member states, Eurostat also publishes quarterly data on intergovernmental lending (IGL).

The IGL, as a percentage of GDP at the end of the second quarter of 2023, stood at 1.6 per cent in the eurozone and 1.3 per cent in the EU, with Cyprus recording a rate of 1.1 per cent.