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What Country has the Most Unsustainable Debt? (hint: not Greece)

What Country has the Most Unsustainable Debt? (hint: not Greece)

When a country experiences slower economic growth, the government receives less in tax revenue and therefore has to borrow money to keep up the delivery of essential services. Any funds borrowed accumulate as public debt, and will eventually have to be repaid. This debt is not necessarily a bad thing — in fact it’s quite normal for a country to raise debt — but excessive debt could put a country’s future economic wellbeing at risk if the underlying reasons that the debt was required in the first place are not addressed.

unsustainable debt

One of the ways to compare debt levels between countries is the debt-to-GDP ratio: a ratio of a country's total debt to its gross domestic product (GDP), where debt is measured in dollars ($) and GDP is measured in the value of goods and services produced per annum ($/year). Therefore, the higher the ratio, the longer it will take for a country to pay off its debt. For instance, a country with debt-to-GDP ratio of 100% could theoretically pay off its debt in one year; but realistically, a country will only devote 5-10% of its GDP to debt repayment, so it would take about 10 years to pay down the debt in this instance.

We built a map to compare the debt-to-GDP ratios of the world’s most representative economies. The size of each country on the map represents the level of debt — a larger size means a higher debt-to-GDP ratio. We also included a color coding to illustrate the GDP growth rates of each country: red countries have negative growth rates (-5% to 0%), and green countries have very high growth rates of more than 5%.

The countries with the highest debt-to-GDP ratios are Japan (230%), Greece (177%), Lebanon (134%), Jamaica (133%), Italy...