EU's Government Deficit Rises To Record High 11.4% Of GDP In Q2 2020 - Eurostat

Umer Jamshaid Published October 22, 2020 | 05:10 PM

MOSCOW (UrduPoint News / Sputnik - 22nd October, 2020) The seasonally adjusted government deficit in the European Union rose to 11.4 percent in the second quarter of 2020, a new record high, the European Union's statistical office, Eurostat, said in a press release on Thursday.

"In the second quarter of 2020, marked by COVID-19 containment measures in all Member States, the seasonally adjusted general government deficit to GDP ratio stood at 11.6% in the euro area and 11.4% in the EU. The second quarter of 2020 saw both the highest deficit recorded in the euro area and the EU since the start of the time series," Eurostat said.

The quarter-on-quarter growth in the deficit to GDP ratio in the European Union, which stood at 2.6 percent in the first quarter of 2020, is also the largest on record, the statistical office said.

The rapid rise in deficits across the bloc has, in part, been the result of measures taken by governments to mitigate the economic and social impacts of the COVID-19 pandemic, Eurostat said, adding that government expenditure in Q2 2020 rose by 95 billion Euros ($112 billion) compared to the first quarter of the year.

In a separate press release, Eurostat announced that government debt in the euro area has risen sharply to 95.1 percent of GDP.

"At the end of the second quarter of 2020, the quarter in which the impacts of the containment measures as well as policy responses to the containment measures fully materialised in increased financing needs, the government debt to GDP ratio in the euro area stood at 95.1%, compared with 86.3% at the end of the first quarter of 2020," Eurostat said.

The government debt to GDP ratio in the EU as a whole rose from 79.7 percent in the first quarter of the year to 87.8 percent in Q2 2020, the statistical office said.

Member states across the European Union this past spring rushed to implement furlough schemes to ensure that individuals left without work due to coronavirus-related quarantine measures would receive an income. Governments have also introduced extensive business support packages to prevent enterprises from closing.