Which Countries Have the Most Debt?

The Economist has a great image on which countries have the most debt as a percentage of GDP. Japan tops the list followed by Italy and the United States. Japan actually has 2x more debt than the U.S. which I find particularly scary and leads me to wonder if Japan could face a ratings downgrade.

Source: Economist

Source: Economist


  1. Shouldn’t we be taking into account here who the lenders of that debt are? In Japan, as far as I know, it is mostly (or, at the very least, a significant amount) national private investors (as it is a saving country, not a spending one) who got, directly or indirectly, fixed-rates state bonds that will not be affected by a rating downgrade (other than an increased risk of default due to the higher insurance costs) – and maybe same thing with Germany.
    Now, if we compare this table with the current account balance, we get an idea of who the government of those countries owe the money to – the ones that look in a really bad position are USA, Spain, UK and Italy…

    My point being that it’s not the same to owe $500,000 to your parents than $250,000 to Fat Tony…

    About the forecasts – for the last two years all the macro data has ended up being way worse than any forecast by IMF (who keeps downgrading their forecasts every other month) as well as pretty much any other institution – do we have any reason to keep believing in them?

  2. Kathy-
    good point speaking of ratings downgrades.
    Japan sovereign CDS rates have been steadily climbing (from about 60 to 118 bps in the last 28 days), while most other countries have been steady or even dropping (US = 86 bps, Germany 79 bps).

    I’ll lay a little bet that the BoJ will follow this week’s SNB’s lead and sell jpy.

    Also, (unrelated), I’;ll bet Trichet gives up and follows all the other central bankers (Fed, BoE, BoJ, BoC) and lowers rates and implements QE. ECB has been sounding move dovish every time…so Eur/$ will be looking at 1.25 or lower again soon.

  3. Ibiza
    I was curious too, about a few other countries/currencies we trade.
    I tried the IMF site that the Economist cited, but found it inscrutable.
    I used the Economist for GDP, and the OECD for total central gov debt. I checked a few of the numbers above to make sure it was apples to apples.

    so here are a few other countries of interest to FX traders (all numbers in USD). NB- one year old data for debt, but it doesn’t appear to differ much from above #):

    Canada GDP $1272 B, debt $389B or 31%
    Australia GDP $781B debt $49B or 6%
    New Zealand GDP $105B debt $27B or 25%
    Switzerland GDP $380B debt $107B or 28%

    one more reason to be bullish AUD…

    and in response to James- the first response to this thread. This data is total debt, not current year spending. However, the US budget balance just took an enormous leap from -3% to -11% of GDP this month…guess why!

  4. Thanks to ‘OBAMA PLAN” our coutry is getting more debt..Now the question is why people vote for Obama?…..now what its next….

  5. Given an 11 trillion dollar US debt, the majority of which appeared under republican presidents since 1980, I dont know how Obama is blamed. Bush left office with the largest deficit in US history in fact.

    In fact since 1940 every democratic president has left office with less debt as a % of gdp than when he arrived. Every republican president since Reagan (3) has left with it greater than when he arrived.

    Still, it needs to stop. Deficits dont matter, until they do. I believe Greenspan said that?

  6. If any president is to blame for the recent happenings in America it is Clinton who un-knowingly began the subprime mortgage crisis by giving every American the right to own a home and take out a loan. Search the internet because you sure aren’t going to hear it on TV.

    Bush, regardless of how much you hate him or disagree with his free-market views, stepped up for every country to fight terrorism thus adding to the debt.

  7. When is the updated 2009 data released? Is that in early January 2010? It might be interesting to compile a list of G20 countries, with the 2008 and 2009 debt as per cent of gdp, check how far off the IMF forecast ended up, the updated 2010 IMF forecast, and maybe the S&P, Moody’s and Fitch ratings and outlooks for 2009 and 2010….

  8. well of course most debt appeared since 1980 and under repub presidents, most presidents since 1980 have been repub. Also during their terms dems controlled the congress almost all the time, usually both houses, and congress is the only body that has the power to spend money. the only time we had a balanced budget with under a repub congress. deficits are due to bloated govmnt and and a too high tax rate. this is due to politicians seeking to buy votes and people placing their personal short-term interest over the country and long-term interest, not to mention the moral rot that tells a person to its fine to use govmt to rob your neighbor. then when the plan fails, raise taxes and run deficits, which leads to more.

    debt has grown steadily since after wwii through repub and dem admins alike, briefly checked during the reagan years, then back to full speed ahead.

    we are arriving at our last chance to maintain value in our currency as a store of wealth, who thinks that our govmt will suddenly start running balanced budgets and surpluses?

  9. And as of today, S&P downgrades the long term rating of Japan’s sovereign debt to AA-.
    Yet again, Ms Lien, thanks for warning us.. almost 2 years in advance!


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