Cyprus recorded a remarkable budget surplus in 2024, standing out as the second highest in the European Union. With a surplus of +4.1 per cent, Cyprus follows only Denmark, which reported a surplus of +4.5 per cent, according to data from Eurostat.
This achievement comes amidst a backdrop of decreasing deficits across the euro area, where the government deficit-to-GDP ratio improved from 3.5 per cent in 2023 to 3.1 per cent in 2024. The overall trend in the EU mirrored this progress, with the ratio dropping from 3.4 per cent to 3.1 per cent.
Budget surplus: Comparative Performance Across EU Member States
Cyprus’s budget surplus puts it in an exclusive group, as only six EU member states managed to report a surplus this year. Besides Cyprus and Denmark, other countries with positive figures included Ireland at +4.0 per cent, Greece at +1.2 per cent, Luxembourg at +0.9 per cent, and Portugal at +0.5 per cent. In stark contrast, many countries faced significant deficits, with Romania experiencing the highest at -9.3 per cent, followed by Poland at -6.5 per cent, France at -5.8 per cent, and Slovakia at -5.5 per cent.
Shifts in Debt Ratios
While Cyprus celebrated its budget surplus, the overall government debt-to-GDP ratio in the euro area saw a slight uptick, rising from 87.0 per cent at the end of 2023 to 87.1 per cent in 2024. The EU also recorded a small increase in its debt ratio, moving from 80.5 per cent to 80.7 per cent. By the end of 2024, twelve member states reported government debt ratios exceeding the 60 per cent GDP threshold, with Greece leading at 154.2 per cent, followed by Italy at 134.9 per cent, and France at 113.2 per cent.
Fiscal Trends and Expenditure
In terms of fiscal aggregates, the euro area’s total government expenditure to GDP ratio was calculated at 49.5 per cent in 2024, while the total revenue to GDP ratio stood at 46.4 per cent. For the EU as a whole, the figures were 49.2 per cent and 46.0 per cent, respectively. These ratios indicate a trend of increased government revenue and expenditure in 2024 compared to the previous year, reflecting a growing economic landscape despite challenges faced by many member states.
