Nicosia, Cyprus. Cyprus recorded one of the largest annual reductions in government debt in the European Union in the third quarter of 2025, according to Eurostat data released this week. The country’s general government gross debt-to-GDP ratio fell by 6.1 percentage points from the same period in 2024, the third-largest decrease in the bloc.
Cyprus decline contrasts with euro area and EU increases
Eurostat data showed the euro area’s debt-to-GDP ratio increased to 88.5 per cent at the end of the third quarter of 2025, up from 88.2 per cent at the end of the second quarter. In the European Union overall, the ratio edged up from 81.9 per cent to 82.1 per cent over the same period.
Member states show mixed annual debt trends
On an annual basis, Cyprus, Greece and Ireland reduced their debt-to-GDP ratios, while sixteen other member states recorded increases. The largest annual increases were reported in Romania, up 5.5 percentage points, and Poland, up 5.0 percentage points, followed by Finland and Bulgaria.
Highest and lowest debt ratios across the EU
By the end of the third quarter of 2025, Greece had the highest debt-to-GDP ratio in the EU at 149.7 per cent, followed by Italy at 137.8 per cent. The lowest ratios were recorded in Estonia at 22.9 per cent and Luxembourg at 27.9 per cent.
Debt composition in the euro area
Eurostat reported that debt securities accounted for 84.2 per cent of total euro area debt. Loans made up 13.3 per cent, while currency and deposits accounted for 2.6 per cent.
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