In this article, we take a look at the 10 countries with the highest debt to GDP ratios. If you want to check out more countries, go directly to the 25 Countries with the Highest Debt to GDP Ratios.
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.
Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also take a peek at 20 Biggest Publishing Companies in the World and 30 Richest Cities in the United States in 2023.
