Government debt across the euro area and European Union rose in the first quarter of 2025, while Cyprus recorded one of the largest annual decreases in debt and posted a strong budget surplus.

At the end of the first quarter of 2025, the general government gross debt to GDP ratio in the euro area stood at 88.0 per cent, up from 87.4 per cent at the end of the fourth quarter of 2024.

In the European Union as a whole, the ratio increased from 81.0 per cent to 81.8 per cent during the same period.

Compared with the first quarter of 2024, the government debt to GDP ratio increased slightly in the euro area, from 87.8 per cent to 88.0 per cent, and in the EU, from 81.2 per cent to 81.8 per cent.

Debt composition remained largely unchanged, with debt securities accounting for 84.2 per cent of total government debt in the euro area and 83.6 per cent in the EU.

Loans made up 13.3 per cent in the euro area and 13.9 per cent in the EU, while currency and deposits contributed 2.6 per cent and 2.5 per cent, respectively.

Intergovernmental lending by EU Member States stood at 1.4 per cent of GDP in the euro area and 1.2 per cent in the EU at the end of the first quarter of 2025.

Cyprus’ debt to GDP ratio stood at 64.3 per cent, down from the previous year and well below the euro area average.

Among Member States, the highest government debt to GDP ratios were recorded in Greece at 152.5 per cent, Italy at 137.9 per cent, France at 114.1 per cent, Belgium at 106.8 per cent, and Spain at 103.5 per cent.

The lowest ratios were found in Bulgaria at 23.9 per cent, Estonia at 24.1 per cent, Luxembourg at 26.1 per cent, and Denmark at 29.9 per cent.

Sixteen Member States experienced an increase in their debt to GDP ratio compared with the fourth quarter of 2024. Ten countries recorded a decrease, while Czechia’s ratio remained stable.

The largest quarterly increases occurred in Austria and Slovakia, both up by 3.5 percentage points.

Slovenia followed with an increase of 2.9 percentage points, Italy with 2.5, Lithuania with 2.4, Poland with 2.2, and Belgium with 2.1 percentage points.

The largest quarterly declines were recorded in Ireland, which fell by 3.7 percentage points, Latvia by 1.2, and Greece by 1.1.

Cyprus’ debt ratio declined by 0.8 percentage points compared to the previous quarter.

On an annual basis, thirteen Member States saw their debt ratios increase, while twelve recorded a decrease. The ratio remained unchanged in Slovenia and Estonia.

Poland registered the highest increase in debt to GDP, rising by 6.1 percentage points over the year.

Finland’s debt ratio rose by 5.1 points, Austria and Romania by 4.1 points each, France by 3.6, Italy by 2.9, Slovakia by 2.6, and Sweden by 2.0 percentage points.

The largest annual decreases were reported by Greece, down by 9.3 percentage points, Cyprus by 8.2, Ireland by 6.1, Croatia by 3.6, Denmark by 3.2, Spain by 2.8, and Portugal by 2.7 percentage points.

Meanwhile, the general government deficit in the euro area and the EU both stood at 2.9 per cent of GDP in the first quarter of 2025.

This marked a decrease in the deficit compared with the fourth quarter of 2024.

In the euro area, seasonally adjusted total government revenue amounted to 46.6 per cent of GDP, a slight decrease from 46.7 per cent in the previous quarter.

The decline was attributed to nominal GDP growing faster than revenue, even as revenue rose by around €11 billion in absolute terms.

Government expenditure in the euro area reached 49.5 per cent of GDP, down slightly compared to the previous quarter.

Although expenditure increased by around €2 bn, this was again outweighed by GDP growth.

In the EU, government revenue remained unchanged at 46.2 per cent of GDP.

However, in absolute terms, revenue increased by about €21 bn compared with the previous quarter.

EU government expenditure declined to 49.1 per cent of GDP from 49.5 per cent, despite a €5 bn rise in spending.

Cyprus stood out with a robust fiscal performance. Its seasonally adjusted general government balance showed a surplus of 5.6 per cent of GDP in the first quarter of 2025.