Czech Republic Records Largest Debt Increase Among EU Countries in Q4 2022

The Czech Republic saw the most significant increase in debt among all European Union countries in the fourth quarter of last year, rising by 2.1 percentage points to 44.1% of GDP compared to the previous year, according to a report by the Eurostat statistical office. The country’s national debt also rose to a record-breaking CZK 2.99tn ($132.6bn). In contrast, EU debt fell by 4 percentage points to 84% of GDP.

The public finance deficit in the Czech Republic decreased to 3.6% of GDP in 2022 from 5.1% of GDP in 2021, according to Eurostat. Across the EU, the deficit fell to 3.4% of GDP from 4.8% in 2021.

In the eurozone, debt decreased by 3.9 percentage points to 91.6% of GDP at the end of last year. The public finance deficit in countries that use the euro also fell to 3.6% of GDP from 5.3% at the end of 2021.

Eurostat states, “In the eurozone and the EU, the decline in the debt-to-GDP ratio is due to higher GDP growth than the growth of national debt in absolute terms.” The national debt of the entire EU increased to over EUR 13.27tn ($15.67tn), while at the end of last September, it was just over EUR 13.20tn ($15.61tn).

Greece remains the most indebted country in the EU, with a debt-to-GDP ratio of 171.3% at the end of last year. Italy was the second most indebted country, with a debt-to-GDP ratio of 144.4%, followed by Portugal, where the ratio stood at 113.9% of GDP. Estonia had the lowest debt-to-GDP ratio, at 18.4%, followed by Bulgaria at 22.9% and Luxembourg at 24.6%.

The Czech Republic’s debt fell slightly from 45.1% of GDP in the third quarter to 44.1% in the fourth quarter. In a preliminary report in January of this year, Eurostat stated that debt in the Czech Republic reached 45.2% of GDP at the end of the third quarter.

In modern Czech history, the state’s debt was at its lowest between 1996 and 1998, reaching 9% of the GDP. Václav Klaus was prime minister at the time. From 1999 to 2013, debt increased steadily from 10% to 41% of GDP. At that time, the country was led by prime ministers like Milos Zeman and Petr Nečas.