Which Countries Have the Highest Public Debt Levels in the World?
Ranking of Countries by Public Debt Level
Public debt refers to the total financial obligations of a country’s government, including bonds and other securities. This debt can be sourced both domestically and internationally. Issuing public debt is a crucial tool that governments use to fund public expenditures and address budget shortfalls. To facilitate comparison between countries and assess a country’s effective debt burden, public debt is typically measured as a percentage of Gross Domestic Product (GDP). Below is a list of the top 10 countries that will have the highest public debt-to-GDP ratio in 2025, according to our panel of analysts.
What is the Country with the Highest Public Debt Level?
Japan is the country expected to have the world’s highest public debt-to-GDP ratio this year, 242%. This high debt burden is relatively recent: In 1990, the ratio was only around 50% of GDP. However, that figure has subsequently surged due to aggressive government spending aimed at reviving an economy stalled by the collapse of the asset-price bubble in the early 1990s. Successive administrations have launched expansive stimulus packages, including substantial infrastructure projects and extensive social welfare spending, to combat persistent deflation and low growth. Moreover, a rapidly aging population has amplified expenditures on healthcare and pensions, significantly adding to the debt burden. Interestingly, despite these immense obligations, Japan’s debt does not tend to disrupt its economy, as it is largely held by domestic investors and institutions, including the Bank of Japan, which in turn maintains low borrowing costs. Nevertheless, Japan faces long-term vulnerabilities from rising debt-servicing costs if interest rates increase; our panelists are indeed forecasting higher interest rates going forward. This could crowd out crucial investment in growth areas. Thus, while manageable in the short term, Japan’s public debt still poses long-term risks to economic stability.
Please visit our website to read about the Remaining Top 10 Most-Indebted Countries.
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1moAnd what is the problem? While a person can borrow several years his or her salary/income (without collaterals) different times in life, why countries could not do so with several times their GDP if risks are measured and hedged (controlled)? I tell you why: unfair speculation (remember Greek people years ago?), myopic Economics and, last but not least, disinformation purposes. Please let's just apply common sense and global 🌏 🌍 🌎 Economics. Thanks for the information and best.