The euro area recorded an increase in gross debt equivalent to 4.5 per cent of quarterly GDP during the third quarter of 2025, according to data published by Eurostat this week.

The financial accounts of the general government sector cover transactions in financial assets and liabilities as well as the stock of financial assets and liabilities.

The net lending and net borrowing indicators, also known as the surplus or deficit, represent some of the most important indicators in government finance statistics alongside gross debt.

Generally, the movement in government debt can be linked with the government balance as one would expect to see an increase in debt when a deficit is observed.

In cases where a surplus is recorded, some of that capital could be used to repay debt, though the statistical body notes this is not necessarily the case.

Deficits can also be financed by the sale of financial assets, or alternatively, debt can be raised to finance the acquisition of financial assets.

Therefore, the evolution of quarterly debt is also linked to the net acquisition of financial assets by the state.

The incurrence of liabilities not covered in the definition of the general government gross debt, such as other accounts payable, valuation differences, and discrepancies, also play a role in explaining the change in debt.

In the third quarter of 2025, the financing of the deficit, which stood at 2.9 per cent of quarterly GDP, explained the main part of the change in the euro area gross debt.

At the same time, the financing of the net acquisitions of financial assets at 0.5 per cent of GDP and the repayment of liabilities not included in the gross debt at 1.0 per cent of GDP also impacted the debt.

Other differences between the change in debt and the deficit comprise notably certain revaluations of debt, adjustments between transactions, and the change in stock at face value.

Discrepancies accounted for 0.1 per cent of quarterly GDP during this specific reporting period.

This information comes from data on quarterly government finance statistics published by the statistical office of the European Union today.

The article presents a handful of findings from the more detailed Statistics Explained article regarding quarterly government finance data.

In 2020 and 2021, due to Covid-19 containment measures and policy responses to mitigate the impact of those measures, the change in debt was mainly influenced by large deficits.

Acquisitions of financial assets were also a major factor influencing the debt levels during the pandemic period.