The euro area first quarter of 2020 debt to GDP ratio increased 86.3%, relative to 84.1% booked at the end of 2019’s fourth quarter. Whereas​, the EU debt to GDP increased 79.5% for the first quarter from 77.7% booked at the end of 2019 fourth quarter, published by the Eurostat. Additionally, in comparison to 2019 first quarter, the government debt to GDP for euro area and EU fell from 86.4% and 80.0%, respectively. Eurostat stated, “the impacts of the containment measures as well as policy responses to the containment measures are expected to materialize fully in increased financing needs only in the second quarter of 2020.”

According to Eurostat, debt securities accounted for 80.6% of EU and 80.9% of euro area general government debt at the end of 2020 first quarter. Also, loans contributed up to 15.5% of euro area and 15.9% of EU government debt, while currency and deposits accounted for 3.5% of euro area and 3.4% of EU government debt.  Eurostat further stated, “due to the involvement of EU Member States’ governments in financial assistance to certain Member States, quarterly data on intergovernmental lending (IGL) is also published. The share of IGL as percentage of GDP at the end of the first quarter of 2020 amounted to 1.9% in the euro area and to 1.6% in the EU.”

The highest ratios for government debt to GDP at the end of the first quarter 2020 by member state, is as follows; Greece (176.7%), Italy (137.6%), Portugal (120.0%), Belgium (104.4%) and France (101.2%). While, the member states with the lowest ratios are, Estonia (8.9%), Bulgaria (20.3%) and Luxembourg (22.3%).  Furthermore, Eurostat noted that, “compared with the first quarter 2019, ten Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2020 and sixteen a decrease, while in Slovakia the ratio remained stable. The largest increases in the ratio were recorded in Finland (+4.7 pp) and Romania (+3.6 pp), while the largest decreases were recorded in Ireland (-5.6 pp), Cyprus and Greece (both -5.3 pp) as well as Portugal (-3.4 pp).”

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.