Sunday, May 24, 2009

The World's Biggest Debtor Nations



The world's biggest debtor nation is surprisingly not the USA. The best way to calculate that is to look at external debt as a percentage of GDP. When you go past 100%, its dangerous times. HK is surprisingly at #4 but one must also look at their financial balance sheet as a whole - HK is an anomaly. Looking at the list one can now easily understand why Milton Friedman thinks that the Euro is a very flawed currency, and may not even outlast one major recession - its happening now, let's see how things turn out.

1. Ireland - 811%

External debt (as % of GDP): 811%
External debt per capita: $549,819

Gross external debt: $2.311 trillion (Q4 2008)
2008 GDP: $285 billion


2. United Kingdom - 336%

External debt (as % of GDP): 336%
External debt per capita: $153,616

Gross external debt: $9.388 trillion (Q4 2008)
2008 GDP: $2.787 trillion


3. Belgium - 327%

External Debt (as % of GDP): 327%
External debt per capita: $155,362

Gross External Debt: $1.618 trillion (Q4 2008)
2008 GDP: $495.4 billion


4. Hong Kong - 295%

External debt (as % of GDP): 295%
External debt per capita: $93,539

Gross external debt: $659.93 billion (Q4 2008)
2008 GDP: $223.8 billion


5. Netherlands - 268%

External debt (as % of GDP): 268%
External debt per capita: $145,959

Gross external debt: $2.439 trillion (Q4 2008)
2008 GDP: $909.5 billion


6. Switzerland - 264%

External debt (as % of GDP): 264%
External debt per capita: $171,478

Gross external debt: $1.304 trillion (Q4 2008)
2008 GDP: $492.6 billion


7. Austria - 191%

External debt (as % of GDP): 191%
External debt per capita: $100,787

Gross external debt: $827.49 billion (Q4 2008)
2008 GDP: $432.4 billion


8. France - 168%

External debt (as % of GDP): 168%
External debt per capita: $78,070

Gross external debt: $5.001 trillion
2008 GDP: $2.978 trillion


9. Denmark - 159%

External debt (as % of GDP): 159%
External debt per capita: $107,026

Gross external debt: $588.7 billion (Q3 2008)
2008 GDP: $369.6 billion


T-10. Germany - 137.5%

External debt (as % of GDP): 137.5%
External debt per capita: $63,767

Gross external debt: $5.25 trillion (Q4 2008)
2008 GDP: $3.818 trillion


T-10. Spain - 137.5%

External debt (as % of GDP): 137.5%
External debt per capita: $57,091

Gross external debt: $2.313 trillion (Q4 2008)
2008 GDP: $1.683 trillion


12. Sweden - 129%

External debt (as % of GDP): 129%
External debt per capita: $73,245

Gross external debt: $663.58 billion (Q4 2008)*
2008 GDP: $512.9 billion


13. Finland - 116%

External debt (as % of GDP): 116%
External debt per capita: $62,579

Gross external debt: $328.56 billion (Q4 2008)
2008 GDP: $281.2 billion



p/s photos: Julie Hoi

5 comments:

easystar said...

Hi Savatore,

I am sure you are aware that external debt is an irrelevant figure. NET external debt is.

Most of those with high external debts are financial center (HK included). So, if HSBC HK borrow $1bn and use that to invest in, say a US Teasury zero coupon worth $105bn in a year time, this adds $1bn to external debt. But with 1.05bn of treasury asset backing it, the debt is irrelevant...

solomon said...

Another relevant question to ask is whether US will lose their AAA status or they have lost it at the background?

This could really disrupt the world asset allocation.

What is yr views on this matter, or it is not a concern at all?

Rob de Graaf said...

I agree with commenter Easystar.

The external debt is irrelevant. I live in the Netherlands and shows to be at place 5. But its one of the most interesting places for international companies to put in headoffice and deploy financial constructions due to the tax situation.

Total net debt per capita in the Netherlands is around 21,000 euro.

DanielXX said...

A really interesting comment on US treasuries I read in another forum:

Is it really risk-free return or is it return-free risk?

US boleh lah! It's about time Asia started preaching to them the merits of regulated economies the way they preached to us about deregulation one decade back! hahah.

hishamh said...

Actually I think gross debt does matter, in so far as it exposes economic units within a country to forex risk - as East Asia found out in 1997/98. If forex liabilities are corporate, but forex assets are public (as in central bank reserves), there will be an economic impact in the event of large currency moves, even if the net position does not change.

Which paradoxically is why I don't think this matters long-term for the Euro bloc - I haven't seen the detailed figures, but I suspect most of the "external debt" referred to here is basically owed within the region and denominated in Euros. In this case, net debt would be a better measure.