In this article, we take a look at 25 countries with the highest debt to GDP ratios.
Global Debt Crisis
Global debt has escalated to a record-high of $300 trillion, implying a 349% leverage on Gross Domestic Product. Federal debts held by the public have risen just as aggressively, with Congregational Budget Office (CBO) predicting such debts to reach 118% of GDP by 2033. CNBC notes that alleviating the debt overhang amidst bloating inflation and slowed economic growth will be excruciatingly painful for economies.
Meanwhile, a strong US dollar has added to the interest rates, making it even more expensive to raise money and repay debts. During this period, mandatory spending and rising costs will continue to outpace revenue and economic growth. As a result, several dozens of economies will likely be pushed into default, while many more already have.
Methodology
To compile the list of 25 countries with the highest debt-to-GDP ratios, we have used statistics from Trading Economics. Countries were then listed in ascending order of high debt to GDP ratio.
Here are the 25 countries with the highest debt-to-GDP ratios:
25. Bahamas
Debt to GDP Ratio: 95.6%
The end of 2021 saw government debt level in the Bahamas reaching 100% of GDP. Standing at more than $11.5 billion, the national debt in the country is approximately six times as big as its revenue base. A tourism-led rebound is likely to improve levels of GDP, with real GDP growth close to 14% in 2021. The economy is also projected to expand by 8% in 2022.
24. United Kingdom
Debt to GDP Ratio: 101%
The United Kingdom has been taking quite a little longer as compared to other countries to manage its COVID-injured public finances. Debt owed by the country is over $2 trillion, with borrowing increasing by 15% in 2023 as compared to the last year. The COVID pandemic and the financial crash have together been responsible for such a high ratio.
23. Mozambique
Debt to GDP Ratio: 101%
Mozambique’s economy is reported to have a debt-to-GDP ratio of approximately 101%, with the country’s debt level standing at $16 billion. The country’s debt-to-GDP ratio has been over 100% since 2016, but forecasts regarding falling debt levels are underway. Accelerating the economy, higher debt revenues, and appreciation of its currency Metical are all reasons driving this decline.
22. Belgium
Debt to GDP Ratio: 105%
Belgium’s debt levels are approximately $617 billion, with the debt to GDP ratio standing at 105%. The energy crisis has been increasing spending in the country, and there are forecasts that the debt levels will rise. The country’s public finances began facing deterioration in the pandemic, and public debt is expected to widen to 5.8% of GDP as of 2023.
21. France
Debt to GDP Ratio: 112%
France has one of the largest debt levels in the world at $3.1 trillion dollars. Its debt to GDP ratio stands at 112%, with persistent primary budget deficits a prime cause of high debt levels. Economic growth has also been sluggish, adding to the increasing debt-to-GDP ratio. French fiscal policy has certainly been lazier in tackling rising debt than other nations.
20. Spain
Debt to GDP Ratio: 113%
Spain’s debt levels are approximately $1.6 trillion, with the debt to GDP ratio standing at 113%. This ratio has fallen by 5 percentage points from 118% in the year 2022, thanks to a responsible fiscal policy and flourishing economic growth.
19. Canada
Debt to GDP Ratio: 113%
National government debt for Canada reached $1.4 trillion in 2022, with provincial and federal debt standing at $2.1 trillion from $1 trillion in 2007/8. A major cause of this rise has been the government running large deficit runs in the pandemic.
18. Sri Lanka
Debt to GDP Ratio: 114%
Sri Lanka’s debt levels hover around $116 billion, with a debt-to-GDP ratio of 114%. The country announced default in April 2022, depicting a classic case of the debt trap. The country plunged itself into this trap due to high-interest borrowing from international capital markets. These borrowings eventually ate the country’s currency cash flows and plunged it into default.
17. Portugal
Debt to GDP Ratio: 114%
Low GDP and productivity growth are prime reasons for the high debt-to-GDP ratio in Portugal. However, economic activity increased in early 2023, with tourism aiding the pace. Ongoing investments and tenders are launching soon, enhancing the country’s economic outlook soon.
16. Cuba
Debt to GDP Ratio: 117%
The pandemic has devastated world economies, and Cuba is no different. International tourism collapsed during the period, crippling an economy already in crisis. Increased financial problems between remitting émigré communities also saw declines in foreign revenue.
15. Bahrain
Debt to GDP Ratio: 120%
High levels of government spending, weakening economic growth, and declined oil prices are all responsible for Bahrain’s high debt-to-GDP ratio. The year 2024 is expected to witness budget savings of around 5% of GDP, largely owing to a VAT increase boosting non-oil revenues.
14. Zambia
Debt to GDP Ratio: 123%
Zambia has had large debt-to-GDP ratios, largely owing to reckless lending by Western banks. UK government loans to tackle climate change have also added to its debt distress. Restructuring such mounting debts in the country means it is heading towards critical negotiations. As such, IMF has agreed to a bailout plan worth $1.3 billion, with strict measures imposed on the Zambian people.
13. Suriname
Debt to GDP Ratio: 124%
Suriname’s debt levels approximate $4 billion, with a debt-to-GDP ratio of 124%. Many years of economic mismanagement have led the country to face external and fiscal imbalances. As a result, inflation has escalated, and the exchange rate has suffered considerable depreciation. All in all, high debts are unsustainable for this country.
12. Bhutan
Debt to GDP Ratio: 125%
Bhutan heavily relies on its hydro-power exports, which is why its debt-to-GDP ratio is so high.
11. United States
Debt to GDP Ratio: 129%
The United States has also been facing a debt that is larger than its GDP for several years. The country reached its debt ceiling in January at $31 trillion-plus, which brings the debt-to-GDP ratio to about 129%. However, the US often increases its debt limit to continue borrowing. Revenue drops, government war funding, and a wide range of tax cuts have been responsible for the large debt-to-GDP ratio for the country.
10. Cape Verde
Debt to GDP Ratio: 130%
Cape Verde’s national debt stands at $3.05 billion as of 2023. The debt to GDP ratio of 130% is largely due to the pandemic, prolonged drought, and the Russia-Ukraine conflict considering it imports 11% oil and 8% cereals from Russia. Services and renewable energy are expected to drive growth in the coming years.
9. Italy
Debt to GDP Ratio: 145%
Italy has a huge public debt of about 145% and mostly runs a current account surplus. About 45% of the stock is foreign-owned, while rich Italian savers hold it too. As of 2023, Italy’s national government debt stood at nearly $3 trillion. However, the country’s economy is expected to show some resilience considering fiscal support and natural gas supply diversion from Russia.
8. Libya
Debt to GDP Ratio: 155%
Libya’s public debt has been reaching high levels, with a debt-to-GDP ratio of 155%. However, the outlook for the economy remains positive as it’s projected to grow by 4.4% in 2023. This is largely due to higher revenues coming in from oil output. Debt is still very high, with many households struggling with poverty and food insecurity.
7. Singapore
Debt to GDP Ratio: 160%
Singapore’s debt levels stand at $560 billion, and its debt-to-GDP ratio is approximately 160%. This debt is largely fiscally sustainable, considering it comprises Singaporean government securities and savings bonds not used for spending. Borrowing proceeds are invested, which means the country has strong assets and zero net debt.
6. Eritrea
Debt to GDP Ratio: 164%
Lack of access to international markets, long years of political instability, and economic sanctions have all been reasons for a high debt-to-GDP ratio for Eritrea. Consistent debt-financed budget deficits will also continue to be the reason for the high ratio in the long term. However, the rise in global demand for metals means revenues are gradually picking pace. As of 2021, Eritrea’s external debt stood at $744,742,728.
5. Greece
Debt to GDP Ratio: 171%
Greece has one of the highest government debts as a percentage of Gross Domestic Product. The country’s debt to GDP ratio began skyrocketing in the financial crisis of 2008, deteriorating further due to structural economic weaknesses and lack of flexibility in their monetary policy. However, recent years have seen primary balances improve, and debt to GDP is projected to decrease to 140% in 2024.
4. Lebanon
Debt to GDP Ratio: 172%
Public finances in Lebanon have been crippling due to interest payments, consuming half of the country’s revenues. High-interest rates, public sector wage increases in 2017, and costs in post-war reconstruction have all added to the country’s financial problems.
3. Sudan
Debt to GDP Ratio: 182%
Poor economic policies, years of conflicts, and sanctions are some of the main reasons for plunging Sudan into a major debt crisis. However, 2021 saw the IMF and World Bank approving Sudan’s eligibility for debt relief, considering its commendable accomplishments in bringing economic reform. Such a debt relief will help improve living standards for Sudanese, reduce poverty, and increase economic prospects.
2. Venezuela
Debt to GDP Ratio: 241%
Venezuela is one of the top-most countries with an external public debt crisis, estimated at more than $150 billion. Prime reasons for this crisis are political corruption, business closures, unemployment, human rights violations, high oil dependency, and chronic shortages of food and medicine. The country has been highly reliant on oil, whose output dropped by 2.5% in 2022. Coupled with inadequate investment in other sectors, GDP levels have shrunk by three-quarters, worsening this ratio.
1. Japan
Debt to GDP Ratio: 264%
Escalating social welfare costs amidst a rapidly aging population, big spending packages, and a shrinking labor force have driven Japan into a debt of approximately $9.8 trillion. This amount of debt is mostly in its own currency; the central bank holds part of it, while domestic savers hold the rest. Only 7% of it is foreign-owned. Therefore, the country is hardly dependent on the kindness of foreigners.
