National debt grips countries, shaping economies and influencing global markets. This piece spotlights twenty nations submerged in debt, dissecting their fiscal realities and their strategies to manage the rising debt loads. Understanding national debt extends beyond sheer numbers; it’s about the debt-to-GDP ratio, a scale weighing debt against economic size.
Excessive national debt can stifle growth, trigger austerity, and limit governmental agility in crisis and development. These country narratives offer a study in economic resilience, providing a template to learn from and strategize against the pitfalls of substantial national debt.
Global debt overview
Global debt has soared, hitting a staggering $235 trillion in recent years. Public and private debts have increased, reaching 96% and 153% of GDP, respectively, largely due to COVID-19 economic stimuli. While richer nations juggle debts with relative ease, poorer countries struggle with the steepest debt-service demands in two decades, stunting growth and progress.
Yet, national debt is not innately harmful; it’s a tool for funding vital investments like infrastructure and education, with the true challenge lying in balancing borrowings with sustainable economic expansion.
Top 20 most indebted countries
From the towering debts of the United States to the crushing debt-to-GDP ratios of Japan and Sudan, the scale of global indebtedness is vast and varied. Developed economies like the United States face the highest absolute numbers, with a national debt of over $29 trillion.
On the other hand, Japan’s debt, while lower in absolute terms, takes the lead when scaled to its GDP at 259.43%. Debt manifests differently across continents, with nations like Greece, Eritrea, and Italy shouldering debt-to-GDP ratios over 150%, reflecting intense fiscal pressures. Rich and poor, large and small, no country is immune to the burdens of debt.
Here’s a detailed list of the top 20 countries with the highest national debt, including both their total debt in US dollars (millions) and their debt as a percentage of GDP:
- United States: $29,463,730 million – 128.13% of GDP
- Japan: $13,053,658 million – 259.43% of GDP
- China: $10,115,837 million
- France: $3,329,379 million – 112.80% of GDP
- Italy: $3,169,955 million – 150.30% of GDP
- United Kingdom: $3,039,338 million
- Germany: $2,968,690 million
- India: $2,379,040 million
- Canada: $2,243,918 million – 112.85% of GDP
- Spain: $1,690,788 million – 118.30% of GDP
- Brazil: $1,495,729 million
- Australia: $954,634 million
- South Korea: $929,584 million
- Mexico: $746,964 million
- Iran: $674,167 million
- Singapore: $650,630 million – 159.87% of GDP
- Belgium: $649,405 million
- Netherlands: $530,350 million
- Indonesia: $488,638 million
- Greece: $431,474 million – 194.50% of GDP
Factors contributing to high debt
Countries fall into debt due to varied, complex factors. A structural mismatch between spending and revenues is a primary culprit; governments often commit to spending beyond their revenue collection, especially on healthcare and retirement programs, against insufficient income.
The aging population intensifies this, with more elderly qualifying for healthcare benefits, thus escalating federal expenses.
The inefficiency of healthcare systems, notably in America, burdens economies, with a large portion of spending on wasteful services. Such systemic inefficiencies, coupled with passive employer and insurer roles, fuel spending without commensurate quality improvements in patient care.
As populations age, the proportion of older adults grows, outpacing the working-age population and magnifying financial pressures on public funds.
Debt relief programs
Debt relief programs offer vital aid to overburdened countries, easing their financial loads through restructurings, cancellations, or reductions. The G20’s Debt Service Suspension Initiative granted temporary relief to many during the pandemic.
The IMF’s Catastrophe Containment and Relief Trust and the World Bank’s Debt Reduction Facility have mobilized billions in support, extinguishing substantial debt and penalties. These efforts provide critical support but must be paired with reforms, better fiscal management, and improved revenue strategies for lasting economic stability.