Top 10 Countries with the Highest Debt to GDP Ratio 2023

A debt-to-GDP ratio is an economic term that contrasts a country’s public debt with its gross domestic product (GDP), which measures the total worth of all the goods and services it produces. The debt-to-GDP ratio, which is stated as a percentage and provides a quick estimation of a country’s capacity to repay its current debts, is frequently used to assess the stability and health of a country’s economy. It is commonly estimated along with metrics like GDP per capita, GDP growth, GNP, and GNI per capita, which relates to one another.

Debt repayment is likely relatively simple for countries with low debt-to-GDP ratios. The debt-to-GDP ratio is frequently high in countries with weak income production or excessive debt. Debt-to-GDP ratios higher than 77Pct can impede economic development and, in some situations, put an entire nation at risk of defaulting on its loans, which would have a disastrous impact on the country’s financial markets and economy.

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Source: World Population Review

By a significant margin, Venezuela has the highest debt-to-GDP ratio as of December 2020. The South American country may have the most important oil reserves in the world, but its GDP has been falling recently, and there are claims that the state-owned oil business is run poorly.

The second-place country is Japan, with a ratio of 266Pct. Japan’s Nikkei (stock market) collapsed in 1992. Banks and insurance businesses received government bailouts and low-interest loans to resurrect. Banks merged to aid the faltering economy, and the government nationalized them and other stimulus programmes. But as a result of these moves, Japan’s debt skyrocketed.

With a GDP of USD111 billion, Ethiopia’s economy has a debt-to-GDP ratio of 46Pct, meaning the country owes USD 51 billion in debt.

11th Year • June 2023 • No. 118 EBR

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