Category Archives: Euro

2/10/18: Government Debt per Employed Person


We often see Government debt expressed in reference to GDP or in per capita terms. However, carry capacity of sovereign debt depends not as much on the number of people in the economy, but on the basis of those paying the lion’s share of taxes, aka, working individuals. So here is the data for advanced economies Government debt expressed in U.S. dollar terms per person in employment:


Some interesting observations.

Ireland, as a younger, higher employment economy ranks fifth in the world in terms of Government debt per person employed (USD 115,765 in debt per employed). In terms of debt per capita, it is ranked in the fourth place at USD 54,126.

Plucky Iceland, the country hit as hard by the Global Financial Crisis as Ireland and often compared to the latter by a range of analysts and policymakers, ranks 22nd in terms of Government debt burden per employed person (USD 56,185) although it ranks 13th in per capita terms (USD 32,502). In simple terms, Iceland has higher employment rate than Ireland, resulting in lower burden per employed person.

When one considers the fact that non-Euro area countries have more sovereign control over their monetary policies, allowing them to carry higher levels of debt than common currency area members, Irish debt per employed person is the third highest in the world after Italy and Belgium, and higher than that of Greece.

Out of top ten debtors (in terms of Government debt per employed person), six are euro area member states (10 out top 15).

Looking solely at the euro area countries, Ireland’s position in terms of debt per capita is woeful: the country has the highest debt per capita of all euro area states at EUR43,659 per person, with Belgium coming in second place with EUR40,139. In per-employee terms, Ireland takes the third highest place in the euro area with EUR93,378 in Government debt, after Italy (EUR98,314) and Belgium (EUR94,340).

21/6/18: Weaker growth signals for the euro area


I have not updated Eurocoin dynamics and euro area growth forecasts for some time now, so here is the latests, from May data:

  • Eurocoin, leading growth indicator for the euro area, has fallen significantly from the local high of 0.96 in February (the highest growth forecast since June 2000) to 0.89 in March, followed by continued decline to 0.76 for April and 0.55 in May
  • May reading is the lowest since December 2016
  • Growth forecasts consistent with Eurocoin dynamics indicate that, assuming revised 1Q growth remains at 0.4 percent, 2Q 2018 growth is likely to come in somewhere in the range of 0.35-0.55 percent


Chart below shows improving outlook for HICP (inflation) over the last 12 months through May 2018, just as the economy beginning to slow down:


On balance, we now have three consecutive months of declining Eurocoin-implied forecasts for euro area growth. It will be interesting to see eurocoin print for June, coming up in about a week, as well as July (coming out prior to the Eurostat growth estimates for 2Q 2018).