The United States of America retains its leadership in the ranking of countries in terms of external debt. This is stated in the message of the analytical information service of the International Organization of Creditors (WOC), which conducted a study of the volume of public debt in different countries of the world and forecasts of debt growth, the correspondent reports.
In 2010, the total public debt of the countries of the world exceeded $41 trillion, but at that time the growth in the volume of liabilities could be justified by the desire of governments to overcome the consequences of the crisis as quickly as possible and return to pre-crisis levels. Statistical reports on the results of 2011 show a positive movement of various economic indicators, including. However, government debts of the world's 50 largest economies also rose to $55 trillion. The total external debt of these states has exceeded $65 trillion. Thus, economic growth was driven by government injections, including through borrowing from non-residents.
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Place in 2011 |
Place in 2010 |
The volume of external debt (external debt), billion US dollars, 2011 |
The volume of external debt (external debt), billion US dollars, 2010 |
Change, % |
External debt/ |
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Great Britain |
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|
Germany |
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Netherlands |
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Ireland |
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Australia |
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Switzerland |
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Source: CIA data, WOC calculations
ATWOCnote that l The leaders of the ranking of countries in terms of external debt in most cases retain their last year's positions. The external debt of the United States became equal to the volume of GDP at the end of 2011. But if we consider the rating for this indicator, then the United States is far from being the leader. The external debt of Ireland is almost 11 times greater than the volume of GDP, Great Britain - 5 times, the Netherlands and Hong Kong - 4 times. Only Japan has this figure below 50%, but this is probably the only positive moment in the debt ratings for this country. The level of Japanese public debt is going through the roof, as can be seen in Table. 2.
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Place in 2011 |
Place in 2010 |
The volume of state debt (public debt), billion US dollars, 2011 |
The volume of state debt (public debt), billion US dollars, 2010 |
Change, % |
State debt/ |
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Germany |
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Great Britain |
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Brazil |
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Netherlands |
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Compared with the results of 2010 in the top ten, everyone remained in their places, with the exception of the UK and China. The latter managed to reduce the sovereign debt by 5%, which made it possible to switch places with Britain, which continues to increase its debts (+17%). In the top ten, China also has the best ratio of public debt to GDP (25.8%).
The US public debt continues to grow and its ratio to GDP has already exceeded 100%. But here it is necessary to understand that the US economy is the largest in the world, and in addition, the States have opportunities to receive share premium. This means that even with the continued upward trend in the debt burden, the US economy still has room for growth.
The highest level of debt burden was recorded in Japan, where the volume of public debt to GDP is 226%. The country continues to fight the consequences of the tsunami mainly through domestic financial injections in the national currency, which explains such a high rate. Greece follows Japan in this indicator. In third place is Italy, which uses every opportunity to avoid the fate of Greece. At the end of 2011, Italy's GDP grew by 7%, and France and Germany by 8% and 9%, respectively. On the whole, 2011 was a rather successful year for the Eurozone countries. Economic growth was observed in all countries except for Greece (-1%).
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State. debt per 1 inhabitant, USD, 2011 |
State. debt per 1 inhabitant, USD, 2010 |
Change, % |
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Ireland |
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Singapore |
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Norway |
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Germany |
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Netherlands |
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Switzerland |
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Great Britain |
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Finland |
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Portugal |
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Source: IMF data, WOC calculations
The highest level of debt burden was recorded in Japan - $105,000 of public debt falls on one inhabitant of the country. In Ireland, which occupies the second place, this figure is more than 2 times lower ($49.9 thousand). As can be seen from the rating over the past year, the debt burden in the top twenty increased by more than 10% on average. With the exception of Sweden and Portugal, where there is a slight decrease in this indicator (-4% and -2% respectively).
Russia is in good positions in all three indicators. The level of external debt to GDP does not exceed 30%, its growth for the year is only 6%. The level of public debt is even lower and does not exceed 10% in relation to GDP, and for every Russian there is 1247 dollars. As can be seen from Table. 4 Almost all debt is covered by international reserves.
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The volume of international reserves, billion US dollars |
Reserve coverage of external debt, % |
Reserve coverage of public debt, % |
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Saudi Arabia |
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Brazil |
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Switzerland |
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Korea, Republic |
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Germany |
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Singapore |
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Indonesia |
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Malaysia |
The public debt of the countries of the world in 2014 continues to grow steadily and it is becoming increasingly difficult to deal with this phenomenon. The recent events in Cyprus and Greece do not forget the dire consequences of budget deficits, when wages were not paid to stabilize the situation, which led to mass strikes.
The public debt of the country is called the financial loans of the government to pay off the budget deficit. Public debt is calculated in the national currency of the country or in US dollars, but for greater clarity it is displayed as a percentage of borrowing from GDP.
The question of the size of the public debt of the countries of the world is of interest to us, because we can see the rating of prosperous countries in which governments work for the benefit of their people.
Information on the size of government debts is regularly published on its website by the International Monetary Fund (IMF).
If we consider the situation with public debts of all countries in general, we can see that at the beginning of 2014 the global public debt amounted to 56 trillion US dollars. The largest is about 17.6 trillion. US dollars. In second place in terms of public debt is Japan with 9.8 trillion. US dollars. In third place in terms of public debt is China with its obligations of 3.9 trillion. USD. True, China is pursuing an active policy of reducing public debt. In other large debtor countries, the public debt is at the level of 1-3 trillion. dollars.
Public debt of the countries of the world at the beginning of 2014
- USA - 17.61 trillion. dollars
- Japan - 9.87 trillion. dollars
- China - 3.89 trillion. dollars
- Germany - 2.60 trillion. dollars
- Italy - 2.33 trillion. dollars
- France - 2.11 trillion. dollars
- Great Britain - 2.06 trillion. dollars
- Brazil - 1.32 trillion. dollars
- Spain - 1.23 trillion. dollars
- Canada - 1.2 trillion. dollars
Japan has the highest debt-to-GDP ratio at 242%. That is, Japan's government obligations are 2 times greater than its own GDP. As you remember, Japan was hit hard by the tsunami in 2011, which provoked an accident at the Fukushima station. Japan was forced to increase its public debt through domestic borrowing in the national currency to combat the consequences of the disaster.
After Japan, the situation with the size of public debt in relation to GDP in Greece is not comforting, which has so many debts to fight the financial crisis that there was even talk of a possible default of Greece, since this figure reached 174%. In third place in the ranking of public debt in relation to GDP is Italy with an indicator of 133%. However, financial analysts point out that Italy has every chance to resist, as it has long-term government securities with a long circulation period. In addition, Italy's government debt in the form of government bonds, for the most part, belongs to domestic investors.
Public debt of the countries of the world in relation to GDP
- Japan - 242.3%
- Greece - 174%
- Italy - 133.1%
- Portugal - 125.3%
- Ireland - 121.0%
- USA - 107.3%
- Singapore - 106.2%
- Belgium - 101.2%
- Spain - 99.1%
- UK - 95.6%
National debt of the countries of the world per capita
- Japan - 99.7 thousand dollars
- Ireland - 60.4 thousand dollars
- USA - 58.6 thousand dollars
- Singapore - 57 thousand dollars
- Belgium - 47.8 thousand dollars
- Italy - 46.8 thousand dollars
- Canada - 45.5 thousand dollars
- France - 42.4 thousand dollars
- Great Britain - 38.9 thousand dollars
- Switzerland - 38.6 thousand dollars
Leading economists and politicians in developed countries are increasingly fearing another bankrupt. Economists' fear is justified due to the presence in the economies of developed countries of the processes of economic slowdown, reduction in income, and as a consequence - the growth of public debt.
Why is there a budget deficit and an increase in public debt?
Among the common reasons for the growth of public debt in the countries of the world, economists include an increase in spending on maintaining social and military programs, constant stimulation of economies to combat the consequences of the financial crisis, a decrease in business activity, etc.
Despite the attempts of all countries of the world to reduce their public debts, the size of the budget deficit is steadily growing. Economists predict Japan, Greece, Portugal, the USA, the Netherlands and Ireland to be at the greatest risk of rising public debt. Among other developed countries, the UK and France will continue to increase their public debt.
What measures are governments taking to reduce the growth rate of public debt?
- They are trying to keep the amount of public debt at the previous level, as if to slow down its growth, due to the development of the country's economy.
- Reconsider the structure of government loans so that the budget deficit does not threaten the security of the country.
- Many countries are trying to reduce the cost of public debt by extending the term of the loan.
- They intend to repay the current amount of public debt to the borrower on time so that there are no penalties and a positive credit history remains.
- Direct borrowed funds to develop the economy of their country.
- Improve the system of control over the consumption of borrowed funds, which allows you to optimize costs in general and find additional ways to save.
- Coordinate the debt policy of the state with the financial and economic policy.
- They organize joint summits with other states in order to find the best measures to reduce public debt.
- Develop and apply various methods of public debt management.
Those countries that managed to effectively manage their public debt were able to stabilize the market mood and remove the panic of business circles. However, most financial market participants and government officials are afraid of a new wave of the financial crisis, which will deepen the problem of public debt repayment.
The only way to get all the countries of the world out of the debt hole is to raise the development of the economy of their own countries.
True, there is another way to temporarily solve the growth of public debt - saving on budget costs. But this, in turn, causes a contraction in the economy and an increase in the ratio of public debt to GDP.
Economists in many countries are constantly talking about budget consolidations. After all, government spending in developed countries increased after the financial crisis and is still not fully optimized. Therefore, the optimization of state budget expenditures is essential in our difficult times.
True, the only country that has successfully taken the path of optimizing budget spending is Ireland. Most other countries in the world are only thinking and planning to take measures to reduce budget spending.
Of course, fiscal consolidation will not solve the problem of reducing public debt immediately and radically. After all, it is possible to fill the budget only with a reasonable tax policy and promotion of the development of the real sector of the economy.
Thus, we have analyzed the essence and significance of the public debt of the countries of the world for the development of the national economy. Also, we reviewed the rating of public debt of the countries of the world in 2014, where we analyzed the largest debtors and their problems. Naturally, public debt will not quickly decrease in the countries of the world, for this it is necessary to create favorable conditions for effective economic development. And the state will pay off the debts when business in the country prospers and pays taxes.
Monarchies hold 40% of the world's sovereign debt, according to Standard & Poor's, one of the top three rating agencies. At the same time, the agency focuses on the difference between absolute monarchs, who have a significant impact on politics in their countries, and constitutional monarchs, who play the symbolic role of the head of state.
All absolute monarchies are concentrated in the Arab world, and their public debt is less than 1% of the total. However, constitutional monarchies tend to have higher credit ratings based on the increased stability and predictability of their policies.
Public debt consists of debt held by the central government, regional and local authorities, state enterprises and organizations.
5. Absolute monarchies
They account for 0.4% of the global public debt. This reflects the countries' strong budgetary performance. They do not need to make large borrowings from outside. Of the absolute monarchies, the highest rating ("AA") is Qatar and emirate Abu Dhabi.
4. Constitutional monarchies
Norway, Spain, Sweden, Luxembourg, Liechtenstein and Denmark make up the majority of the debtor kingdoms (5.9% of the public debt). Spain has a satisfactory credit rating ("BBB"), all other countries - the highest ("AAA").
3. States belonging to the British Commonwealth of Nations
The top three in terms of global public debt in 2015 are countries under the protectorate of Queen Elizabeth II. She is the head of more than a dozen countries within the Commonwealth - including Great Britain,Canada, Bahamas and papua new guinea. The total public debt of these states amounted to 8.2%. Wherein Great Britain, Canada and Australia have a long-term credit rating of "AAA" according to Standard & Poor's.
2. Japan
Tokyo's national debt is $11 trillion, which is 25.4% of the total debt or 246.14% of GDP. Since the early 1990s Japan is in constant stagnation. The policy pursued by the Japanese government to overcome the crisis only increases the level of debt. Currently the government Japan spends almost half of its total tax revenue to pay off a huge debt. Despite this, the yield on 10-year Japanese bonds remains at a surprisingly low level, under 1%.
1. Non-monarchist states
These countries account for 60.2% of the world public debt. The largest debtor is Greece. Its debt as a percentage of GDP is 172.73%. In July 2015, the IMF released a debt sustainability report for Greece. It says that due to policy easing over the past year and the recent deterioration in the domestic macroeconomic and financial environment, Greece's public debt has become highly unsustainable. Slightly less government debt Italy- 133.7% of GDP. Russia is not included in the top 20 countries with the largest public debt; at the beginning of 2015, the state's external debt amounted to $41 billion, excluding debts of state-owned companies, the Central Bank of the Russian Federation and banks.
At the same time, in the near future, government debt obligations like a snowball will be able to sweep away everything in its path. These are the conclusions of the organizers of the study of the World Organization of Creditors (WOC).
The public debt of the countries of the world continues to increase, and, according to the latest estimates, it is becoming increasingly difficult for countries not only to reduce its volume, but at least to stabilize it, the study says. According to the preliminary results of 2012, the total debt of all states of the world exceeded $55 trillion. Most of this volume (75%) is made up by the obligations of only seven developed economies of the world - the G7 countries. Over the previous year, they not only did not alleviate the situation, but also increased their debts by 5%. In general, the volume of debt of developed countries increased by 12% and amounts to 110% of their total GDP.
In developing countries, the situation is not so critical: in 2012, the total amount of public debt increased by 1% and in relation to GDP is 34%. The largest increase is observed in the countries of the Middle East and North Africa, where government debt rose by 5%. In other regions, the increase is 1-2% of the previous year.
Public debt of key regions of the world
| Regions | Public debt, $ billion, 2012 | Public debt, $ billion, 2011 | Change | Public debt/GDP, 2012 |
|---|---|---|---|---|
| The developed countries | 46539 | 41715 | 12% | 110% |
| G7 | 42261 | 40398 | 5% | 129% |
| European Union | 14316 | 14458 | -1% | 89% |
| Developing countries | 9329 | 9234 | 1% | 34% |
| Asia | 4114 | 4017 | 2% | 32% |
| Latin America and the Caribbean | 2812 | 2817 | 0% | 49% |
| Middle East and North Africa | 798 | 757 | 5% | 27% |
| CIS | 362 | 357 | 1% | 14% |
Sources:woc,IMF, CIA.
Leaders have not changed
If we consider all the countries of the world as a whole, then there were no significant changes in the leaders. The first two lines of the rating are occupied by the USA and Japan, which each have $16 trillion. and $14 trillion. respectively. Thus, more than half of the world's sovereign debt falls on these two countries. Then come the countries whose public debt ranges from $1 trillion. up to $3 trillion. After Japan, whose government obligations are almost 3 times higher than its own GDP, the most difficult situation is in Italy. At the end of 2012, sovereign debt in relation to GDP amounted to 126%. However, experts note that the situation in this country is more stable than in its southern European neighbors, since government bonds have long maturities and are mainly owned by domestic investors.
At the same time, in percentage terms, the most significant increase in public debt among the countries considered was recorded in Kazakhstan. The index in this country rose by more than a third (+32%), moving Kazakhstan to 58th place in the overall ranking in terms of public debt. The largest increase in financial liabilities among developed countries was noted in Spain and Australia. At the end of 2012, debt in these countries increased by 23% and 19%, respectively.
China continues to reduce its public debt, but at a very slow pace. At the end of 2012, the volume of debt decreased by 6%. At the same time, a year earlier, the government repaid another 5% of its obligations. The state debt also decreased by 8% in Greece, which can be explained by the write-offs that creditors went to in 2012. Financial liabilities also decreased in Hungary - a decrease of 15% provided the country with 42nd place in the overall ranking.
| Place in 2012 | Place in 2011 | Country | The volume of public debt, $ billion, 2012 | The volume of public debt, $ billion, 2011 | Change | Public debt/GDP, 2012 |
|---|---|---|---|---|---|---|
| 1 | 1 | USA | 16730,5 | 15536,3 | 8% | 107% |
| 2 | 2 | Japan | 14148,9 | 13476,9 | 5% | 237% |
| 3 | 3 | Germany | 2888,7 | 2881,5 | 0,3% | 83% |
| 4 | 4 | Italy | 2611,2 | 2640,7 | -1% | 126% |
| 5 | 5 | France | 2440,0 | 2387,9 | 2% | 90% |
| 6 | 6 | Great Britain | 2175,1 | 1977,4 | 10% | 89% |
| 7 | 7 | China | 1770,9 | 1886,1 | -6% | 22% |
| 8 | 9 | Canada | 1579,3 | 1483,8 | 6% | 88% |
| 9 | 8 | Brazil | 1569,7 | 1619,0 | -3% | 64% |
| 10 | 11 | Spain | 1267,7 | 1032,3 | 23% | 91% |
| 11 | 10 | India | 1202,6 | 1123,0 | 7% | 68% |
| 12 | 12 | Netherlands | 547,0 | 547,6 | -0,1% | 68% |
| 13 | 13 | Mexico | 520,3 | 506,3 | 3% | 43% |
| 14 | 14 | Belgium | 492,0 | 502,1 | -2% | 99% |
| 15 | 15 | Greece | 462,9 | 501,3 | -8% | 171% |
| … | ||||||
| 26 | 25 | Russia | 222,9 | 221,3 | 1% | 11% |
Sources:woc,IMF, CIA.
One debt for each
In the issue of public debt per inhabitant, Japan is still the leader. For each inhabitant of the country there is more than $110 thousand. The consequences of the tsunami and the accident at the nuclear power plant in Fukushima will have a negative impact on the economy of the country of the Rising Sun for a long time to come. Japan is followed by Ireland ($53.9 thousand per inhabitant), which has almost been caught up by Singapore and the United States. In these countries, each inhabitant has $53,000 of public debt. At the same time, the pressure on the residents of Qatar has increased significantly: now each of them accounts for more than $37,000, which is 19% higher than a year earlier.
In Russia as a whole, the situation with public debt is stable. At the end of 2012, its volume increased by 1% and does not exceed 11% of the GDP level. As for the debt per capita, each resident accounts for a little more than $1.5 thousand.
| Place | Country | Public debt per 1 inhabitant, $, 2012 | Public debt per 1 inhabitant, $, 2011 | Change |
|---|---|---|---|---|
| 1 | Japan | 110875,1 | 105373,8 | 5,2% |
| 2 | Ireland | 53992,8 | 50585,1 | 6,7% |
| 3 | Singapore | 53435,9 | 52994,6 | 0,8% |
| 4 | USA | 53229,0 | 49804,4 | 6,9% |
| 5 | Norway | 49438,7 | 48246,3 | 2,5% |
| 6 | Canada | 45347,6 | 43086,6 | 5,2% |
| 7 | Belgium | 44549,8 | 45854,0 | -2,8% |
| 8 | Italy | 42879,6 | 43557,5 | -1,6% |
| 9 | Greece | 41313,1 | 44783,4 | -7,7% |
| 10 | France | 38474,8 | 37827,0 | 1,7% |
| 11 | Qatar | 37506,5 | 31793,9 | 18% |
| 12 | Switzerland | 36240,8 | 37446,2 | -3,2% |
| 13 | Austria | 36035,6 | 35992,4 | 0,1% |
| 14 | Germany | 35323,3 | 35234,9 | 0,3% |
| 15 | Great Britain | 34490,5 | 31565,3 | 9,3% |
| … | ||||
| 47 | Russia | 1570,8 | 1554,1 | 1,1% |
| 51 | China | 1308,1 | 1399,8 | -6,6% |
Sources:woc,IMF, CIA.
Stocks won't save
In the matter of international reserves, China can boast of the most impressive "airbag". Over the past year, the country has increased the amount of IR to $3.5 trillion, which is 3 times more than the public debt. Second place is held by Japan, whose figures reach $1.3 trillion. However, this is enough to cover only 10% of the public debt. Third place is firmly won by Saudi Arabia, which continues to increase its reserve funds. Russia, which now occupies fourth place, in the near future may be "pushed" by the United States, which is also increasing its reserve fund. However, it should be noted that in case of urgent need, most countries will not have enough “piggy banks” to cover all their debts.
| Place | Country | The volume of international reserves, $ billion | Reserve coverage of public debt |
|---|---|---|---|
| 1 | China | 3549 | 200% |
| 2 | Japan | 1351 | 10% |
| 3 | Saudi Arabia | 626,8 | 1749% |
| 4 | Russia | 561,1 | 252% |
| 5 | USA | 537,267 | 3% |
| 6 | Taiwan | 391 | 195% |
| 7 | Brazil | 371,1 | 24% |
| 8 | Switzerland | 330,585 | 114% |
| 9 | Korea, Republic | 319,2 | 82% |
| 10 | Hong Kong | 299,6 | 348% |
| 11 | India | 287,2 | 24% |
| 12 | Singapore | 253,3 | 88% |
| 13 | Germany | 234,104 | 8% |
| 14 | Algeria | 190,5 | 1078% |
| 15 | Italy | 173,3 | 7% |
Sources:woc,IMF, CIA.
Pessimism becomes reality
With steadily increasing pressure, there are more and more forecasts of an imminent explosion of "debt bubbles". Countries that are already overwhelmed with debt cannot find a way to repay their obligations and are forced to borrow even more to pay the interest on current loans. For most developed economies, as well as for countries in which the ratio of public debt to GDP exceeds 60-70%, the point of no return seems to have already been passed. Therefore, sooner or later they will repeat the fate of Greece or Cyprus, experts say. However, in this case, there will be no one to borrow funds for the “rescue”.
However, based on the forecast of the dynamics of the growth of public debt relative to GDP, there is a slight decrease in this indicator in the second half of the current decade. However, the IMF's optimists are still betting on an increase in GDP, and not on a real reduction in public debt.
In general, experts are increasingly inclined towards a pessimistic scenario: in the near future, a crisis in public finances is quite real, which in its power and consequences will many times surpass the financial crises of past years.
Forecast of the dynamics of public debt in relation to GDP in key regions of the world
Sources:WOC, IMF, CIA.
At present, many Russians are interested in information concerning the external debt not only of our state, but also of other countries of the world. Which of them has the smallest foreign debt, and who has the largest? Our experts will help you deal with these issues.
External debt
Before ranking the countries of the world in terms of the size and amount of external debt, this concept itself should be considered. It is established primarily at the legislative level. Thus, our country has a Budget Code, according to which the external debt of any country to other states is understood as a financial credit debt in foreign currency.
In the dictionary of economic terms, this concept is considered in the form of total monetary obligations that the borrowing country must return to the creditor state within a certain period of time. The amount of such credit debt will include both the loan itself and interest on its use, requiring payments. For a country, this amount of debt includes obligations:
- international banks;
- governments of other countries of the world;
- private banks owned by foreigners.
There are two types of external debt:
- Current (the one that needs to be returned to foreign creditors in the current year, that is, in 2019).
- General state (accumulated over several years together with unpaid interest, it should be reimbursed in subsequent years).
To estimate the amount of external debt of a single state, specialists working in the field of economics and finance use the ratio between credit debt to foreign creditors and the gross domestic product of the debtor country itself. In this case, GDP (gross domestic product) is a macroeconomic indicator representing the total amount of everything that a country has earned in a year from goods and services produced.
External debt indicators
Experts argue that external debt affects not only the economic sphere of the borrowing country, but can also lead to long-term political dependence. This is determined by the critical level of overall debt indicators:
- The solvency of the country (the ability to timely fulfill all the obligations assumed at the expense of its own resources), which includes:
- dependence on export goods;
- relation to the state's GDP (that is, to the main base of household resources);
- repayment of debt obligations at the expense of state budget revenues.
- Liquidity (the ability of existing assets, such as securities, to be quickly sold at market prices), taking into account:
- term of the debt (short-term or for a long period of time);
- the sufficiency of international reserves;
- monitoring the risks of non-payment of debt obligations.
- Indicators for the public sector, namely:
- the impact of tax revenues on public debt;
- changes in the exchange rate of foreign currency to home.
Thanks to these indicators, which affect almost all sectors of the economy, it is possible to calculate how quickly the debtor state will return the money borrowed from other countries of the world. Thus, for example, a safe level of debt is indicated by the ratio of debt to export earnings not exceeding 200% (if this indicator is higher than 275%, then external debt can be partially written off as unpaid).
In relation to local GDP, the critical level of debt will be considered from 60% (according to IMF calculations) and from 80-100% (according to World Bank calculations). Exceeding this limit indicates that the repayment of financial debt from other countries of the world is due to the transfer of resources. Instead of producing goods and services for the internal needs of the state, they are produced for export trade.
Also, to predict the return of debt obligations with interest, one should take into account:
- the ratio of these obligations (they may be due to a number of preferential conditions);
- the degree of openness of the external capital market;
- real exchange rate regime;
- the likelihood of an economic crisis.
If a country has limited access to its own and international reserves, then there can be no question of any solvency. Therefore, many developing countries have difficulties with the return of cash loans. They use all the profits received from domestic production to pay off their external debt, and the current costs of their own activities are taken from new credit receipts.
Positive aspects of the external debt of the state from the countries of the world
It would seem that credit financial debt to other countries does not bring anything good for the state - it is an inefficient use of money received on credit, servicing credit obligations, economic dependence on the creditor country, leading to a change in political relations between states. But experts in economics and finance also find positive aspects in external debt:
- any foreign loan improves the economic situation of the borrowing country;
- the influx of foreign capital helps in the development of certain sectors of the economy (for example, transport, energy, etc.);
- the general budget of the state is restored.
But these positive aspects begin to work only in the case of effective allocation of borrowed funds.
Ranking of countries in the world by external debt
Experts working in the World Banking System annually calculate all possible prospects for repayment of external debt for countries around the world. Also in the scope of their activities is the compilation of rating tables for external debt with a miscalculation of the percentage ratio of this type of debt to nominal GDP. For 2019, the top 10 countries in the world with the lowest external debt were compiled:
| The name of the country | External debt (million dollars) | External debt to GDP (%) |
| USA | 16 893 000 | 101 |
| Great Britain | 9 836 000 | 396 |
| Germany | 5 624 000 | 159 |
| France | 5 633 000 | 188 |
| Netherlands | 3 733 000 | 309 |
| Japan | 2 719 000 | 46 |
| Spain | 2 570 000 | 165 |
| Italy | 2 684 000 | 101 |
| Ireland | 2 357 000 | 1060 |
| Luxembourg | 2 146 000 | 3411 |
As a result of the analysis of these tables, it can be concluded that there are a surprisingly small number of countries that do not have external debt - only three (Brunei, Macao and the Republic of Palau), unlike other states that owe almost the whole world.
There are countries that are both borrowers and lenders to each other. So why don't they offset their financial debts? But this depends not only on the political relationship between them, but also on the terms of the loan – repayment terms, interest payments, etc. After all, the offsetting of such debts can not only nullify debts, but also seriously affect the working capital of state financial companies. This situation, in turn, can lead to a crisis in the economy of both states.