In 2023, Bulgaria maintained one of the lowest government debt-to-GDP ratios in the EU at 22.9%, as overall government deficits in the euro area and EU slightly increased. Government deficits rose to 3.6% of GDP in the euro area and 3.5% in the EU, while government debt levels fell across the region.

In 2023, the government deficit to GDP ratio increased slightly in both the euro area and the European Union (EU), according to Eurostat, the statistical office of the European Union. In the euro area, the ratio rose from 3.5% in 2022 to 3.6%, while in the EU it increased from 3.2% to 3.5%. However, government debt to GDP ratios saw a decline, with the euro area ratio falling from 89.5% at the end of 2022 to 87.4% at the end of 2023, and the EU ratio dropping from 82.5% to 80.8%.

This data, based on national reports from EU Member States in their second notification of 2024 for the excessive deficit procedure (EDP), covers the period from 2020 to 2023 and adheres to the ESA 2010 system of national accounts.

In 2023, most EU countries recorded deficits, except for Denmark (+3.3%), Cyprus (+2.0%), Ireland (+1.5%), and Portugal (+1.2%). The largest deficits were found in Italy (-7.2%), Hungary (-6.7%), and Romania (-6.5%), with ten Member States exceeding the 3% of GDP deficit threshold.

Government debt ratios varied widely across the EU at the end of 2023. The lowest ratios were in Estonia (20.2%), Bulgaria (22.9%), and Luxembourg (25.5%), while the highest were recorded in Greece (163.9%), Italy (134.8%), and France (109.9%). In total, 13 Member States had debt ratios exceeding 60% of GDP.

Government expenditure in the euro area for 2023 stood at 49.5% of GDP, with revenue at 45.9%, while in the EU, these figures were 49.0% and 45.5%, respectively. Both revenue and expenditure ratios decreased compared to 2022.

Eurostat has expressed concerns about the quality of Estonia's 2023 data due to issues with the timing of military expenditure reporting, which affects the deficit by approximately 0.4% of GDP. This is being discussed with Estonian authorities for future corrections.

Government debt at 88.1% of GDP in euro area

At the end of the second quarter of 2024, the general government gross debt to GDP ratio in the euro area (EA20) stood at 88.1%, compared with 87.8% at the end of the first quarter of 2024. In the EU, the ratio also increased from 81.3% to 81.5%.

Compared with the second quarter of 2023, the government debt to GDP ratio decreased in both the euro area (from 88.8% to 88.1%) and the EU (from 81.9% to 81.5%).

At the end of the second quarter of 2024, the general government debt was made up of 84.0% debt securities in the euro area and 83.6% in the EU, 13.4% loans in the euro area and 13.9% in the EU and 2.5% currency and deposits both in the euro area and in the EU.

Due to the involvement of EU Member States' governments in lending to certain Member States, quarterly data on intergovernmental lending (IGL) are also published. The IGL as percentage of GDP at the end of the second quarter of 2024 stood at 1.5% in the euro area and at 1.3% in the EU.

The highest ratios of government debt to GDP at the end of the second quarter of 2024 were recorded in Greece (163.6%), Italy (137.0%), France (112.2%), Belgium (108.0%), Spain (105.3%), and Portugal (100.6%), and the lowest were recorded in Bulgaria (22.1%), Estonia (23.8%) and Luxembourg (26.8%).

Compared with the first quarter of 2024, nine Member States registered an increase in their debt to GDP ratio at the end of the second quarter of 2024, seventeen a decrease, and the ratio remained stable in Denmark. The largest increases in the ratio were observed in Finland (+2.0 percentage points – pp), Austria and Italy (both +1.8 pp), France (+1.6 pp), Portugal (+1.2 pp), Poland (+0.9 pp) and Sweden (+0.6 pp). The largest decreases were recorded in Cyprus (-2.1 pp), Croatia (-2.0 pp), Greece (-1.8 pp), Lithuania (-1.7 pp), Spain (-0.9 pp), Czechia (-0.8 pp), the Netherlands and Germany (-0.7 pp), and Romania (-0.6 pp).