- The debt-to-GDP ratio is the proportion of a country’s total debt to its total GDP (GDP).
- The debt-to-GDP ratio can also be thought of as the number of years it would take to repay debt if GDP were used as a measure of payback.
- The greater the debt-to-GDP ratio, the less likely the country is to repay its debt and the greater the chance of default, which might generate financial panic in domestic and international markets.
Venezuela 304.125%
The national debt of this South American country is estimated to be $160 billion based on data from 2020. When it comes to the countries with the largest debt, Venezuela is clearly in the lead.
What does a healthy debt-to-GDP ratio look like?
Applications. The debt-to-GDP ratio is a measure of an economy’s financial leverage. The government debt-to-GDP ratio should be less than 60%, according to one of the Euro convergence criteria.
Why is Japan so in debt?
The Japanese public debt is predicted to be around US$12.20 trillion (1.4 quadrillion yen) as of 2022, or 266 percent of GDP, the largest of any developed country. The Bank of Japan holds 45 percent of this debt.
The collapse of Japan’s asset price bubble in 1991 ushered in a long period of economic stagnation known as the “lost decade,” with real GDP decreasing considerably during the 1990s. As a result, in the early 2000s, the Bank of Japan embarked on a non-traditional strategy of quantitative easing to inject liquidity into the market in order to promote economic growth. By 2013, Japan’s public debt had surpassed one quadrillion yen (US$10.46 trillion), more than twice the country’s yearly gross domestic product and already the world’s highest debt ratio.
Japan’s public debt has continued to climb in response to a number of issues, including the Global Financial Crisis in 2007-08, the Tsunami in 2011, and the COVID-19 epidemic, which began in late 2019 and has consequences for Tokyo’s hosting of the 2020 Summer Olympics. In August 2011, Moody’s downgraded Japan’s long-term sovereign debt rating from Aa2 to Aa3 due to the country’s large deficit and high borrowing levels. The ratings drop was influenced by substantial budget deficits and government debt since the global recession of 2008-09, as well as the Tohoku earthquake and tsunami in March 2011. The Yearbook of the Organisation for Economic Co-operation and Development (OECD) noted in 2012 that Japan’s “debt surged above 200 percent of GDP partially as a result of the devastating earthquake and subsequent reconstruction efforts.” Because of the growing debt, former Prime Minister Naoto Kan labeled the issue “urgent.”
Why is the United States’ debt so high?
Since its inception, debt has been an element of this country’s activities. Following the Revolutionary War, the United States government became indebted in 1790. 9 Since then, further wars and economic downturns have fuelled the debt over the decades.
Which country has the most debt?
Venezuela has the highest debt-to-GDP ratio in the world as of December 2020, by a wide margin. Venezuela may have the world’s greatest oil reserves, but the state-owned oil corporation is thought to be poorly managed, and the country’s GDP has fallen in recent years. Simultaneously, Venezuela has taken out large loans, increasing its debt burden, and President Nicolas Maduro has tried dubious measures to curb the country’s spiraling inflation.
Which country will have the highest debt in 2021?
What countries have the world’s largest debt? The top 10 countries with the largest national debt are listed below:
With a population of 127,185,332, Japan holds the world’s biggest national debt, accounting for 234.18 percent of GDP, followed by Greece (181.78 percent). The national debt of Japan is presently $1,028 trillion ($9.087 trillion USD). After Japan’s stock market plummeted, the government bailed out banks and insurance businesses by providing low-interest loans. After a period of time, banking institutions had to be consolidated and nationalized, and other fiscal stimulus measures were implemented to help the faltering economy get back on track. Unfortunately, these initiatives resulted in a massive increase in Japan’s debt.
The national debt of China now stands at 54.44 percent of GDP, up from 41.54 percent in 2014. China’s national debt currently stands at more than 38 trillion yuan ($5 trillion USD). According to a 2015 assessment by the International Monetary Fund, China’s debt is comparatively modest, and many economists have rejected concerns about the debt’s size, both overall and in relation to China’s GDP. With a population of 1,415,045,928 people, China currently possesses the world’s greatest economy and population.
At 19.48 percent of GDP, Russia has one of the lowest debt ratios in the world. Russia is the world’s tenth least indebted country. The overall debt of Russia is currently about 14 billion y ($216 billion USD). The majority of Russia’s external debt is held by private companies.
The national debt of Canada is currently 83.81 percent of GDP. The national debt of Canada is presently over $1.2 trillion CAD ($925 billion USD). Following the 1990s, Canada’s debt decreased gradually until 2010, when it began to rise again.
Germany’s debt to GDP ratio is at 59.81 percent. The entire debt of Germany is estimated to be around 2.291 trillion ($2.527 trillion USD). Germany has the largest economy in Europe.
What is the size of the Philippine debt?
THE PHILIPPINES MANILA, Philippines In January, the Philippines’ total outstanding debt surpassed P12 trillion for the first time, as pandemic-related costs continued to grow despite dwindling government revenue.
On Friday, March 4, the Bureau of the Treasury announced that the total debt had climbed by P301 billion, or 2.6 percent, since the end of December. Debt has increased by 16.5 percent since January 2021.
External borrowing accounted for 30.4 percent of total debt, while domestic borrowing accounted for 69.6 percent.
Domestic debt increased by 2.4 percent, or P197.38 billion, from end-December to P8.37 trillion. This was mostly due to the government’s P300-billion interim advances from the Bangko Sentral ng Pilipinas.
External debt increased by P103.7 billion, or 2.9 percent, to P3.66 trillion at the end of December. The increase in external debt was caused by the weakening of the Philippine peso against the dollar and the net availment of external liabilities.
This is the Philippines’ greatest debt pile to date, limiting borrowing options for the future president.