Cyprus recorded the European Union’s largest quarterly decline in government debt as a share of GDP in the second quarter of 2026, as its debt burden continued to fall while borrowing levels across the bloc increased, according to Eurostat.
Debt Ratio Falls To 48.5%
Cyprus’ government debt fell to 48.5% of GDP at the end of June, down from 51.5% in the first quarter and 58.1% a year earlier.
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In absolute terms, debt declined to €19.2 billion from €20.03 billion at the end of March and €21.7 billion in June 2025. Cyprus also recorded the EU’s second-largest annual reduction in its debt-to-GDP ratio, after Greece.
Cyprus Outpaces Other EU Member States
Greece recorded the largest annual decline, at 11.2 percentage points, followed by Cyprus at 9.5 points, Slovenia at 4.5 points and Portugal at 3.4 points.
Quarterly, Cyprus led the bloc, ahead of Greece, where the ratio fell by 2.7 percentage points, and Hungary, which recorded a 2-point decline.
By contrast, the EU’s debt-to-GDP ratio increased to 82.9% in the second quarter from 82.5% in the first. The euro area ratio rose to 88.8% from 88.4%. Compared with the same period in 2025, the figures increased from 81.4% and 87.3%, respectively.
Debt Levels Remain High Across Europe
Greece had the EU’s highest debt ratio at the end of June, at 140.8% of GDP, followed by Italy at 139.9%, France at 119.1%, Belgium at 110.2% and Spain at 101.4%.
The lowest ratios were recorded in Estonia at 26.1%, Denmark at 27.1%, Luxembourg at 28.2% and Bulgaria at 28.7%.
Compared with the first quarter, debt ratios rose in 15 member states and fell in 10, while the Netherlands and Spain remained unchanged. Poland recorded the largest quarterly increase, at 3 percentage points.
Cyprus Maintains A Government Surplus
Cyprus’ debt reduction comes alongside a strong fiscal position. In 2025, the country recorded a government surplus of 3.6% of GDP, the highest in the EU, according to audited figures published by Cystat and Eurostat. Government debt at the end of that year stood at €20.05 billion, or 52.3% of GDP.
However, Cyprus’ seasonally adjusted government surplus narrowed to 3.3% of GDP in the second quarter of 2026, from 3.8% in the first quarter.
The figures come from Eurostat’s latest government deficit and debt release, based on member states’ second 2026 notifications under the EU’s Excessive Deficit Procedure and compiled under the European System of Accounts 2010 methodology.
