Debt is required for everyday business and you might not be surprised to know that even the countries require debt for day to day transactions and development process. There are many ways in which a country can obtain a debt from World Bank or from other countries. This is not usually a problem until the country is able to replay is debt. But what is the country is not able to pay its debt? In such a case, the country is headed towards an economic crisis which could turn things really ugly. A country may resort to measures likes taking more debt for meeting the debt expenses but that would eventually increase the load on the country.
In economics, we look for the statistics of what percentage of GDP is the debt standing at. If the percentage figures are higher then you know that the country is heading towards an economic crisis like that of Greece. At present, Greece has a debt which is 245% of the total GDP and we all know what’s going on here.
Here, in this article, we are talking about external debt only and that is the debt which a country owes to the foreign creditors.
Do you know which countries have the largest external debt in the world? If you do not, go through the list and you may be surprised to know the results. So, here is the list and all the figures mentioned below are USD.
10. Spain – 2,116,000 Million
The 10th largest external debt country in the world is Spain and the debt is about 2,116 Trillion Dollars. This is about 167% of the GDP and the strong economy of the country is helping the government in reducing this figures. The budget cuts are in place and the inflation is well under the control which acts to as an advantage to the government.
9. Ireland – 2,236,430 Million
Ireland has a lower debt when compared with the other nations in the list but the debt to GDP ratio of the country stands at 780% which is quite high. The country has been implementing budget cuts and reforms to deal with the problem and this is helping Ireland in dealing with the problem efficiently.
8. Italy – 2,324,420 Million
Italy is 8th on our list and the country has a debt to GDP ratio of 126%. At one point in history during the Craxi Era, the debt was much higher and there was a significant increase in the foreign debt during that era. But today, the debt is under control and the country will be able to manage the external debt if it stays on the right track.
7. Japan – 3,516,200 Million
Japan has been dealing with many problems in the recent year and one such problem is the workforce that is growing old. In addition to this, the country has also experienced a slow growth since last few years. The debt of Japan is very much in control and it stands at 74% of the total GDP which is easily manageable. At one point in time, this was much higher but Japan is able to deal with such issues easily.
6. Luxembourg – 4,013,190 Million
Luxembourg is also a part of European Union and it is next on our list. The debt level might not look high but when you look at the debt to GDP Ratio, the debt is really high. At present, the country has a Debt to GDP % of 6731% and it has increased by over 2000% in last four years. It is the highest in the world and the main cause of this was the financial crisis of 2008.
5. Netherlands – 4,306,190 Million
Next on our list is the Netherlands and the country is also the part of European Union. The country has a debt which is equivalent to 533% of the GDP and this could certainly be alarming in the coming future. European Union would certainly help the country in bailing out in case the need arises but the country had been in such a situation before as well and it was able to deal with it easily.
4. Germany – 5,141,400 Million
On number 4, we have Germany and the country is a part of European Union. In addition to this, the country is also one of the largest contributors to the budget of the EU. The country’s debt stands at 148% of the total GDP and the country already has Debt-Brake plans in place. In addition to this, Germany also has the highest possible rating of AAA and as per many credit rating agencies; Germany looks stable for next few years.
3. France – 5,369,125 Million
Next on our list is France and the country has a debt of about 5, 359 Trillion which is certainly a huge sum of money. To make it worse, this amount is 213% of the total GDP of the country. The debt has grown significantly in last few years and this could even lead to a downgrade in the credit rating of the country which would eventually increase the borrowing cost.
2. United Kingdom – 7,852,460 Million
We all have read news about the United Kingdom is in a little problem as it chose for Brexit and in addition to this, the growth in GDP is also coming to a standstill. Another indication of the economic trouble is the external debt. At the moment, the country owes a huge sum to the foreign creditors and the sum is 283% of the GDP. The country might soon need to take the corrective measures or else it may be too late.
1. United States of America – 18,624,000 Million
The highest External Debt is of the United States of America and the figures are certainly quite high. As per the statistics, this is almost 98% of the GDP of the United States of America but well the United States of America is able to manage the debt and the country would be able to come out of the debt easily if the country maintains a stable growth in the next 10 years.
These were the top 10 largest external debt countries in the world and if you are wondering about the figures of Asian countries like India, Pakistan and China then here are the figures. India has a total debt of 471, 852 Million and it is just 20% of its GDP. Talking about China, China has a debt of 1,562,800 Million which is just 13% of the GDP of China. For Pakistan, it is about 26% of the GDP. There are also some countries where the debt is quite insignificant and it is as low as 0 for many countries.
I’m Hina Khan, working as a writer at Worldblaze.in blog. I love dancing and listening punjabi music. Here I’m sharing all the interesting stuffs that will definitely entertain you.