Japan is the most debt-ridden country in the world in 2019, with government debt amounting to 235.96 percent of the country’s Gross Domestic Product (GDP) according to the International Monetary Fund (IMF).
Most people think of Japan as a highly developed and prosperous country. With a GDP per capita of 39,306 US dollars in 2018, its economy is among the most advanced in the world, home to global powerhouses such as Toyota, Honda, Sony, and Nintendo, just to name a few.
Debt to GDP ratio of 236 percent may seem high, but it is not the highest that Japan has ever had.
During the Second World War, the Empire went to extreme lengths to finance its war effort, resulting in public debt to GDP ratio of 260 percent in 1944.
Although the level of the debt is noticeably high, the government of Japan does have some advantages over other greatly indebted nations because most of its debt is held within the country and so the government is unlikely to face problems financing the debt, which is denominated in Yen.
Japan is followed by Greece, which is still recovering from the effects of its economic crisis and subsequent bailout, at 191.27 percent debt of its GDP.
Greece’s debt crisis began in 2010 when the country said it might default on its debt owed to the European Union (EU). To avoid default, the EU loaned Greece enough to continue making payments.
It was the biggest financial rescue of a bankrupt country in history. As of January 2019, Greece has only repaid 41.6 billion euros. It has scheduled debt payments beyond 2060.
Italy and Portugal follow with national debts of 132 percent and 126 percent respectively to their GDPs.
Several African countries also have high national debts, including Sudan (176.49 percent), Eritrea (129.43 percent) and Gambia (111.45 percent).
Of the world’s major economic powers, the United States has the highest national debt at 105 percent of its GDP.
China, the world’s second-largest economy and home to the world’s largest population (1,415,045,928), has a national debt ratio of just 51.2 percent of its GDP.
Germany, as Europe’s largest economy, also has a relatively low national debt ratio at 59.81 percent.
Lowest National Debts
The tiny Kingdom of Brunei with a population of just 434,076 has the lowest national debt in the world of 2.49% of its GDP.
In Africa, Botswana has the lowest national debt to its GDP at only 12.84 percent, followed by DR Congo with a national debt of 13.31 percent of its GDP.
Kenya’s Debt Crisis
Kenya’s public debt now stands at 5.4 trillion shillings with analysts estimating that it is likely to hit the 6.2 trillion mark in the course of the year.
Domestic debt has ballooned to 142.6 billion shillings to 2.692 trillion shillings in two months while the external debts have dipped slightly by 22 billion shillings to 2.707 trillion shillings.
According to the IMF, Kenya’s national debt stands at 56.95 percent of its GDP which is considered average compared to other economies around the globe that have exceeded the 100 percent limit.