National Debt Crisis: 13 Countries in Bigger Financial Trouble Than the U.S.

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What is the national debt? Just as individuals use credit or take out a loan to make a purchase, countries do the same to boost their economies. The national debt is a country’s combined debt to other governments, private lenders, or banking institutions.

While there is a lot of talk about the ballooning U.S. national debt, many other countries are in similar or worse situations.

National Debt Explained

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A nation’s debt is typically measured against its gross domestic product (GDP). The debt is weighed against a country’s ability to pay back the borrowed monies. When looking at raw dollars, the United States has the highest national debt, but when measured against its GDP, which is the highest in the world, it drops to 14th on the list of countries with high debts. What countries have high debt to GDP ratio? Here is the list, according to World Population Review.

Japan

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Japan has the world’s highest percentage of national debt at 259.43% of its annual GDP, totaling over $13 trillion. During the 1990s, the Japanese economy experienced stagnation, which led to the government launching several initiatives, such as selling bonds and bailing out banks and insurance companies with low-interest credit, to help reboot the struggling economy in the 2000s.

These steps salvaged Japan’s economy, but they also added greatly to the country’s national debt. 

Sudan

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The second largest national debt to GDP is Sudan, at 200.35%. A vast majority of Sudan’s population works in agriculture. However, the secession of South Sudan significantly affected the country’s economy because the south contained over 80% of the nation’s oilfields.

Because of this, the GDP has been decreasing, and inflation has been increasing since 2010. 

Greece

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Greece’s national debt began to skyrocket during the 2008 financial crisis. Monetary inflexibility and structural weaknesses lead to the now 194.5% debt to GDP, meaning Greece’s debt is $430 billion.  

Eritrea

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Located on the horn of Africa, this nation has a high debt-to-GDP ratio of 179.66%. Decades of war with Ethiopia have not helped the economy flourish.

Singapore

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Despite the high numbers, 650 million dollars in debt with a ratio of 160%, Singapore’s debt is fiscally sustainable. The debt is made up of Singaporean government securities and savings bonds not used for spending. Borrowing proceeds are invested, which means the country has solid assets and zero net debt.

Maldives

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154.39% of GDP is tied to the national debt in this South Asian archipelago country. The pandemic did not help things in this small island that relies heavily on tourism to support its economy.

Lebanon

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High interest rates are shackling Lebanon’s economy. Half of the country’s revenues are going towards interest payments. The debt to GDP is 151%. 

Italy

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Italy has an enormous debt to GDP percentage of 150.3%, about 3 trillion dollars. About 45% of Italy’s stock is foreign-owned, with some elite Italians holding some.

Cape Verde

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Cape Verde’s debt of 145% of GDP is largely due to the pandemic, a drought, and the continuing conflict between Ukraine and Russia. 

Barbados

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This Caribbean nation has a significant national debt of 135% of GDP. 

Venezuela

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Venezuela’s debts are estimated at more than $150 billion. The primary reasons for this high percentage 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, which has dropped in production. Also, GDP levels have shrunk by three-quarters, making the ratio even worse at 133.61%. 

Bhutan

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Bhutan heavily relies on its hydro-power exports, which is why its debt-to-GDP ratio is so high at 132.42%

Bahrain 

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High levels of government spending, weakening economic growth, and declining oil prices are all responsible for Bahrain’s high debt-to-GDP ratio, which is 129.73%. 

United States

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While there are many countries beating out the U.S., America’s debt to GDP ratio of 122% is nothing to brag about. This is up almost 4X from a low of 31.8% in 1981 and only continues to grow with the country’s increasing deficit spending.

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Source: World Population Review

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Meredith Hutchings

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