Euro area government debt ratio hits 88.7 percent of GDP in first 3 months

(MENAFN) According to official figures released on Monday by Eurostat, the ratio of government debt to gross domestic product (GDP) across the euro area reached 88.7 percent in the first quarter of 2024. This marks a slight increase from the previous quarter, where the ratio stood at 88.2 percent. The 27-member bloc's statistical department highlighted this upward trend in its recent report, which also noted a similar pattern within the broader European Union (EU). Specifically, the general government gross debt to GDP ratio for the EU rose from 81.5 percent at the end of the fourth quarter of 2023 to 82.0 percent in the first quarter of 2024.

On an annual basis, there was a notable improvement in the government debt to GDP ratio for both the euro area and the EU. The euro area's ratio decreased from 90.1 percent in the first quarter of 2023 to 88.7 percent in the same period of 2024, indicating a positive trend despite the recent quarterly increase. Similarly, the EU saw its ratio decline from 83.0 percent to 82.0 percent over the same year-long span. This annual decrease suggests that while short-term fluctuations may occur, the overall trajectory of government debt relative to economic output is moving in a favorable direction.

In a separate release, Eurostat provided insights into the general government deficit as a proportion of GDP. For the first quarter of 2024, the seasonally adjusted general government deficit to GDP ratio was reported at 2.6 percent for both the euro area and the EU. This figure is a crucial indicator of fiscal health, reflecting the difference between government revenues and expenditures. The consistency of the deficit ratio across both the euro area and the EU underscores the shared fiscal challenges and policy responses within the region.

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