The national debt of the countries of the world is the dominant factor in destabilizing not only the financial situation in the world, but also the economic one. The only way out of the situation is to find ways to reduce global debt, with a decrease in its growth rate inclusively. According to world analysts, while the first world crisis arose as a result of the active growth of debts of the financial sector, corporate economy and households, the crisis of the 21st century will be caused precisely by the growth of government debt of most countries of the world. Experts of the financial market with concern say that the debt obligations of countries by 2015 have every chance to turn into plain paper.
What is the statistics of 2014 talking about?
The national debt of the countries of the world as of the end of 2014 has terrifying volumes.
- Japan - public debt corresponds to 234% of GDP.
- Greece - 183%.
- Portugal - 148%.
- Italy - 139%.
- Belgium - 135%.
The global analytical company McKinsey has added Spain (132%) and Ireland (115%), Singapore (105%), France (104%) and the UK (92%) to the top ten countries in terms of public debt. An interesting fact is that America in this rating got 11th place with 89% of GDP. It is immediately worth noting that in accordance with official state statistics, back in 2011, US government debt overcame 100% of GDP. As for the statistics of 2013, the amount of debt increased to 106.6%. According to preliminary calculations, in 2014 the debt of America should be at the level of 109.9%. Currently, countries are actively pursuing policies to reduce government debt. The effectiveness of events and the final indicators of 2015 can only be evaluated in December.
Lowest Government Debt Ratios
There is a rating of countries not only with large debts, but also with minimal ones. It can be noted the national debt of the world in descending order:
- Norway - public debt is 34% of GDP.
- Colombia - 32%.
- China - 31%.
- Australia - 31%.
- Indonesia - 22%.
States that have virtually no debt and whose debt is less than 20% of GDP are Peru (19%) and Argentina (19%), Chile (15%), Russia (9%) and Saudi Arabia (3%) .
The relationship of national debt and the level of development of the countries of the world
The level of public debt of the countries of the world allows us to establish a certain relationship between the amount of debt and the level of development of the state. It is worth saying that the least attract funds to cover the state budget deficit , which are at the stage of active development. Countries that are considered to be economically developed have a budget surplus much more often, and they get into debt systematically. If we consider debt not as a percentage of GDP, but in monetary terms, in this category America has taken the lead. Her national debt has long crossed the limit of $ 18 trillion. World economic analysts say an increase in debt by the end of 2015 to $ 19 trillion. Japan ranks second in the category, with $ 10.5 trillion in debt. Next comes China - 5.5 trillion. These three countries account for about 58-60% of total world debt. At the same time, Russia, which in mid-2014 had debts corresponding to 0.1% of the world debt, is today included in the “garbage rating” of countries for which it is almost impossible to obtain a loan on the international market.
Situation dynamics
The national debt of the countries of the world has a positive dynamics, it is systematically increasing. Only during the period from 2007 to 2014, not only PIGS countries that pose a danger to the EU (Portugal, Ireland, Italy, Greece and Spain), but also international market leaders, in particular Japan, Italy and France, managed to increase their debts several times. America has surpassed all the states of the PIGS group. According to preliminary forecasts, the situation in the world will only increase. Absolute and relative increase in debt is likely to be characteristic of countries with a high level of economic development.
Why do advanced economies have heavy government debt?
The reason for the phenomenon is that the pace of economic growth does not allow not only to repay, but also to service the loans taken. For most economically developed countries, not only zero, but also minus rates of economic development are characteristic. After a thorough analysis of the situation, McKinsey experts concluded that the hardest things to refuse to receive a loan to refinance their debts will be in countries such as Spain and Japan, Italy, Portugal, the UK and France. Experts see a solution to the problem in a comprehensive restructuring of the economy, by completely unlinking it from government debt.
Trends and Observations
The rating of the state debt of the countries of the world, according to experts of the largest German publishing house "Spiegel", has a direct connection with the characteristics of the development of states.
- The greater the state debt in a country, the more such concepts as democracy and liberalism flourish in its politics.
- Developed countries spend money from the budget, not focusing on the actual state of the economy. To say in simple terms "living beyond their means." The more developed a country is considered to be, the more external debt it has.
- The country's economic development is fully consistent with debt growth. The processes are parallel and almost identical.
Strange statistics, or What does the external public debt of the countries of the world show
The above observations from Spiegel specialists are confirmed by the actual situation in the world. Consider major international alliances. So, the "Big Seven", in theory, combined the economies of the most powerful countries in the world. If we compare the GDP and the national debt of the countries of the world from this alliance, we can see the following indicators:
- Great Britain - debt corresponds to 92% of GDP.
- Germany - 72%.
- Canada - 86%.
- Italy - 139%.
- USA - 109.9%
- France - 98%.
- Japan - 234%.
Comparing these indicators with the indicators of the states that make up the BRICS, experts draw certain conclusions. So, Russia (9% of GDP), Brazil (65% of GDP), China (31% of GDP) and South Africa (50% of GDP) look more “economically healthy” against world leaders. It is worth saying that at least 0.5 billion people live in the territory of the G7 countries, who consume many times more goods and services than about 3 billion people in the territory of the BRICS countries.
What does the analysis of the situation in 2015 mean?
It is problematic to evaluate the national debt of the countries of the world in real time, since official data will be presented only by the end of 2015. According to preliminary estimates, taking into account the fact that the growth of debts due to the economic situation in the world continues at an active pace, this year it will take about 6.3% more funds to service them. Representatives of the Bloomberg agency report that the strongest countries in the world are actively refinancing their debts by issuing new loans from the IMF. From official sources, it became known that by the end of 2015, the BRICS countries and the G7 states should pay off debt obligations in the amount of $ 6.96 trillion. Experts from the global economy can hear opinions that 2015 will be favorable and the amount of debts will become less, which at this stage seems an unrealistic forecast.