Euro-Area Government Debt Increases to 92.2% of GDP

Euro-area government debt swelled in the first quarter, driven by Italy and the five countries receiving international aid amid Europe’s fiscal crisis.

State debt in the 17-nation euro zone rose to 92.2 percent of gross domestic product from 88.2 percent in the first three months of 2012, the European Union’s statistics office in Luxembourg said today.

Intergovernmental lending in the context of the financial crisis increased to 2.1 percent of GDP from 1.2 percent in the year-earlier period, Eurostat said.

The euro-area economy, which has contracted for six straight quarters, probably stagnated in the three months through June and will return to growth this quarter, according to a Bloomberg News survey of economists. The International Monetary Fund forecasts the euro economy to shrink 0.6 percent this year.

Government debt in Greece, the recipient of two bailout programs since the crisis broke out there in 2009, soared to 160.5 percent of GDP from 136.5 percent in the year-earlier period, according to today’s report.

Italy had the second-highest first-quarter debt level in the euro area at 130.3 percent of GDP, up from 123.8 percent a year earlier, Eurostat said.

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