This article looks at the 10 countries with the lowest debt to GDP ratio. For more countries, go to 25 Countries with the Lowest Debt to GDP Ratios.
10. Estonia
Debt to GDP ratio: 18.4
Having one of the lowest debt levels in the European Union, Estonia’s debt accounts for 18.4% of GDP. The fall in debt levels can largely be attributed to GDP growth and support of fiscal policy in the country. Growth in the Estonian economy has been coming from real estate, information and communication, construction, storage activities, and transportation.
9. Russia
Debt to GDP ratio: 18.2
In order to keep itself insulated from global capital markets, Russia has had its debt levels kept to a bare minimum. Conservative foreign policies have helped the country achieve this goal. GDP, as of 2021, was valued at $1775.88 billion, with the oil and gas industry accounting for 15% of GDP. Meanwhile, external debt stood at $100.4 billion in early 2023.
8. Burundi
Debt to GDP ratio: 17.2
Due to continued recovery in agriculture and public investments, Burundi’s growth rate for 2023 is projected to be 4.6%. However, the country has been facing severe economic shocks in the past due to the pandemic and other macroeconomic imbalances. Increased import prices have further aggravated inflation, widened fiscal deficits, and also worsened current account pressures.
7. Congo
Debt to GDP ratio: 14.6
The Democratic Republic of Congo is a poor country, with almost 70% of the population living in extreme poverty. Its economy experienced a growth of 6.1%, primarily due to mining sector exports and investments. Despite a low debt-to-GDP ratio, it is classified as having debt distress due to its high arrears. Numerous political conflicts have taken place within the country throughout the years as well.
6. Azerbaijan
Debt to GDP ratio: 11.7
As of December 2021, external debt for Azerbaijan stood at $8.1 billion, while nominal GDP was reported to be $20.4 billion in September 2022. The country has a comfortable cushion against rising public debt due to adequate gross official reserves. This cushion is also complemented by foreign assets held by the State Oil Fund of Azerbaijan (SOFAZ), estimated to be $50 billion.
5. Turkmenistan
Debt to GDP ratio: 8
Turkmenistan lies in a strategic position between China, Russia, and Europe. The country holds the fourth-largest natural gas reserves in the world. It has healthy public accounts and an overall low level of debt. 2023 is expected to be a period of growth for the country. However, the country is highly dependent on hydrocarbons, accounting for 60% of exports in 2021.
4. Afghanistan
Debt to GDP ratio: 7.4
Afghanistan’s debt to GDP is deceptively low, although it is at a high risk of external debt distress. The country is facing not only a fragile security situation but also domestic revenue shortfalls, an uncertain political situation, and a rapid exchange rate depreciation. The country’s debt sustainability is largely dependent on a continuous inflow of donor grants against considerable fiscal and external deficits.
3. Kuwait
Debt to GDP ratio: 7.1
Kuwait has a large public sector with a generous welfare state. Expenditures on salaries, transfers, and subsidies are huge, which is why development and project spending remains restricted. The country holds an estimated 6% of the world’s oil reserves which account for more than half of its GDP. Slow external demand in 2023, coupled with oil production cuts, means growth will be slower. Therefore, GDP is expected to increase by 2.6%.
2. Hong Kong
Debt to GDP ratio: 3
IMF has reported that Hong Kong’s debt-to-GDP ratio stands at 3%, with GDP amounting to $368.14 billion as of 2021. Due to its prudent financial policy of not relying on deficit financing, it has managed to keep its debt levels low. The country holds substantial capital and liquidity buffers, and its overall financial sector is top-notch. Economic growth continues forward, with revenues coming in mainly from domestic economic activity and tourism services.
1. Brunei
Debt to GDP ratio: 1.9
Brunei is one of the rare few countries with virtually no external debt. It is a small and wealthy country which exports crude oil and natural gas. The revenues coming in from the petroleum sector roughly account for half of their total GDP. The country can largely fund its economy through lending by its own banks.
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