In the second quarter of 2021, the government deficit and debt to GDP ratios were 6.9 and 98.3% respectively in the euro area (compared with -7.1 and 100.0% in the first quarter) and 6.3 and 90.9% in the European Union (compared with -6.6 and 92.4%), according to data released by the Statistical Office of the European Union (Eurostat) on Friday 22 October.
Among the 25 countries for which data are available, the highest deficits were observed in France (-9.6%), Hungary (-8.5%), Spain (-7.3%) and Latvia (-7.0%). In Germany, the deficit reached -6.0%.
Despite the fiscal measures to support the economy in response to the coronavirus pandemic, several countries reduced their deficits below the 3% of GDP threshold: Sweden and Poland (both -1.3%), Bulgaria (-2.5%), Ireland (-2.6%), the Netherlands (-2.7%) and Lithuania (-2.9%). Luxembourg (+3.6%) and Denmark (+0.4%) even recorded a budget surplus.
According to Eurostat, the deficit to GDP ratio decreased compared to the previous quarter, mainly due to higher GDPs, while expenditure and revenue increased in absolute terms compared to the first quarter.
Government debt. In terms of debt, the decline in the debt to GDP ratio at the end of the second quarter was due to the economic recovery, while the stock of government debt continued to increase to finance the measures put in place to mitigate the economic and social impact of the pandemic.
At the end of the second quarter, the highest ratios of government debt to GDP were recorded in Greece (207.2%), Italy (156.3%), Portugal (135.4%), Spain (122.8%), France (114.6%), Belgium (113.7%) and Cyprus (112.0%).
The lowest ratios were observed in Estonia (19.6%), Bulgaria (24.7%), Luxembourg (26.2%) and Sweden (37.9%).
Compared with the first quarter of 2021, Malta and Slovakia recorded an increase in their government debt to GDP ratio, 23 other countries experienced a decrease, while the ratio remained unchanged in Bulgaria and Estonia. The largest decreases were recorded in Cyprus (-9.4%) and Slovenia (-5.0%). (Original version in French by Mathieu Bion)