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Visualizing the Snowball of Government Debt

The global economic tide can change fast, and in the event of a recession or rapidly rising interest rates, debt levels could come back into the spotlight very quickly.
Visual Capitalist creates and curates enriched visual content focused on emerging trends in business and investing. Founded in 2011 in Vancouver, the team at Visual Capitalist believes that art, data, and storytelling can be combined in a manner that makes complex issues and processes more digestible. Covering high-growth opportunities and industries such as technology, mining, and energy, Visual Capitalist reaches millions of investors each year. Visual Capitalist’s infographics have been featured in The Wall Street Journal, The New York Times, Zero Hedge, Maclean’s, Gizmodo, The Vancouver Sun, and Business Insider.
Visual Capitalist creates and curates enriched visual content focused on emerging trends in business and investing. Founded in 2011 in Vancouver, the team at Visual Capitalist believes that art, data, and storytelling can be combined in a manner that makes complex issues and processes more digestible. Covering high-growth opportunities and industries such as technology, mining, and energy, Visual Capitalist reaches millions of investors each year. Visual Capitalist’s infographics have been featured in The Wall Street Journal, The New York Times, Zero Hedge, Maclean’s, Gizmodo, The Vancouver Sun, and Business Insider.

Visualizing the Snowball of Government Debt

Visualizing the Snowball of Government Debt

Over the last five years, markets have pushed concerns about debt under the rug.

While economic growth and record-low interest rates have made it easy to service existing government debt, it’s also created a situation where government debt has grown in to over $63 trillion in absolute terms.

The global economic tide can change fast, and in the event of a recession or rapidly rising interest rates, debt levels could come back into the spotlight very quickly.

THE DEBT SNOWBALL

Today’s visualization comes to us from HowMuch.net and it rolls the world’s countries into a “snowball” of government debt, colored and arranged by debt-to-GDP ratios. The data itself comes from the IMF’s most recent October 2018 update.

The structure of the visualization is apt, because debt can accumulate in an unsustainable way if governments are not proactive. This situation can create a vicious cycle, where mounting debt can start hampering growth, making the debt ultimately harder to pay off.

Here are the countries with the most debt on the books:

Rank Country Debt-to-GDP Ratio (2017)
#1 Japan 237.6%
#2 Greece 181.8%
#3 Lebanon 146.8%
#4 Italy 131.8%
#5 Portugal 125.7%
#6 Sudan 121.6%
#7 Singapore 111.1%
#8 United States 105.2%
#9 Belgium 103.4%
#10 Egypt 103.0%

Note: Small economies (GDP under $10 billion) are excluded in this table, such as Cabo Verde and Barbados

Japan and Greece are the most indebted countries in the world, with debt-to-GDP ratios of 237.6% and 181.8% respectively. Meanwhile, the United States sits in the #8 spot with a 105.2% ratio, and recent Treasury estimates putting the national debt at $22 trillion.

LIGHT SNOW

On the opposite spectrum, here are the 10 jurisdictions that have incurred less debt relative to the size of their economies:

Rank Country Debt-to-GDP Ratio (2017)
#1 Macao (SAR) 0.0%
#2 Hong Kong (SAR) 0.1%
#3 Brunei 2.8%
#4 Afghanistan 7.0%
#5 Estonia 9.0%
#6 Botswana 14.0%
#7 Russia 15.5%
#8 Saudi Arabia 17.2%
#9 DRC 18.1%
#10 Paraguay 19.5%

Note: Small economies (GDP under $10 billion) are excluded in this table, such as Timor-Leste and Solomon Islands

Macao and Hong Kong – both special administrative regions (SARs) in China – have virtually zero debt on the books, while the official country with the lowest debt is Brunei (2.8%).