Which countries have the highest public debt levels?

The increase in global debt over the last decade has been led by public debt in much of the world, as public debt replaced private debt in the post-crisis recession. Much of this was brought on by stimulus programs and quantitative easing policies adopted by central banks around the world in an attempt to turn the global economy around. With interest rates at historic lows around the world, governments took advantage of cheap borrowing costs. However, once economic growth resumed, central banks were reluctant to normalize interest rates for fear that financial markets and economies would not be ready for the shift. Interest rates remained low for the last decade, while most major central banks adopted some kind of quantitative easing policy, which entailed massive purchases of securities.

This is not just a problem in developed economies. Emerging markets and even the poorest countries in the world have been gorging themselves on cheap debt. According to the IMF, debt-to-GDP ratios in emerging market and middle-income economies have reached almost 50%, levels that have not been seen since the 1980s during the Latin American debt crisis; a decade that has come to be known as, “the Lost Decade.” Even the world’s poorest economies, which had their debt written off in 2005 by the G7 countries’ Gleneagles agreement, have seen their debt-to-GDP surge to 40% of GDP.

With global debt levels at all-time highs and global growth appearing to be on the downward trend going in to 2019, the challenge for central banks and governments will be to reduce sovereign debt by following more prudent fiscal policies i.e. bring fiscal deficits under control and reduce state reliance on debt.

With that said, let’s take a look at the top 10 countries in terms of public debt-to-GDP according to the FocusEconomics Consensus Forecasts for 2019 through 2023. Find the full list below the infographic.

Public Debt Forecasts 2019-2023