The 10 Countries Deepest In Debt

Due to global economic recession, several nations are facing the issue of high debt levels in comparison with their gross domestic product (GDP). European nations such as Ireland, Greece, and Portugal are badly hit – where this issue is coupled with high unemployment rates that are about 14%. This signifies that these nations have low wealth. The blend of tremendously high debt, sinking GDP, and rising liabilities has triggered credit downgrades.

Moody’s has already rated several prominent nations with downgraded credit standings, which include many European Union member countries facing crushing government debt. Here are the top 10 countries with the peak debt-to-GDP ratios.

10. United Kingdom (80.9% debt of GDP)

With general government debt of $1.99 trillion for 2011, GDP per capita of $35,860, unemployment rate of 8.4%, and credit rating of AAA; U.K seems to have managed to keep its financial standing secured and stable. It is because of its independence due to which U.K is not swallowed by the European debt crisis.

9. Germany (81.8% debt of GDP)

Germany has GDP per capita of $37,591, unemployment rate of 5.5%, and credit rating of AAA. A good portion of the IMF and EU bailout package was funded by Germany to help Greece in 2010. Regarded as the largest economy and fiscal throttle-hold of the EU, it has maintained debt stability for the full eurozone.

 8. France (85.4% debt of GDP)

The country has GDP per capita of $33,820, unemployment rate of 9.9%, and credit rating of AAA according to Moody’s. Regarded as the third-biggest economy in the European Union and one of the most economically stable nations, Standard & Poor’s has recently demoted its credit rating from AAA to AA+. This demotion has naturally given a shock to the French government that claims its economy to be as stable as that of the U.K.’s.

7. United States (85.5% debt of GDP)

With GDP per capita of $47,184, unemployment rate of 8.3%, and credit rating of AAA; the U.S.A government debt has increased over years, which was only 45.6% of GDP in 2001. According to Moody’s, the debt has doubled from $6.4 trillion in 2005 to $12.8 trillion in 2011. Therefore, Standard & Poor’s has downgraded its credit rating from AAA to AA+.

6. Belgium (97.2% debt of GDP)

Belgium has the GDP per capita of $37,448, unemployment rate of 7.2%, and credit rating of AA1. In 1993, the nation’s public debt-to-GDP ratio rose to 135% but came down subsequently to around 84% by 2007. But in the course of four years, the ratio has jumped to almost 95%. This is also the reason why its credit rating has gone down.

5. Portugal (101.6% Debt of GDP)

5th on our list is Portugal with the GDP per capita of $25,575, unemployment rate of 13.6%, and credit rating of BA3; Portugal is one the worst victims of global recession wherein its low GDP per capita has played a part role. In 2011, the IMF and the EU offered a $104 billion bailout because of its big budget deficit and rising debt.

4. Ireland (108.1% Debt as GDP)

The Irish land is witnessing GDP per capita of $39,727, 14.5% unemployment rate, and BA1 as the credit rating. There was a time when Ireland was the healthiest EU nation. However, its lowest unemployment rate in the early 2000s pushed it down. According to the Moody’s, the general government debt of the nation is $224 billion that is far more than the GDP of $216 billion.

3. Italy (120.5% Debt of GDP)

Italy has GDP per capita of $31,555, unemployment rate of 8.9%, and credit rating of A2. Its sluggish economic growth is responsible for its increasing public debt. With deep analysis, Moody’s demoted the credit rating of Italy from A2 to A3.

2. Greece (168.2% Debt of GDP)

With GDP per capita of $28,154, unemployment rate of 19.2%, and credit rating of CA; Greece seems to be the worst sufferer of economic recession. It was the most suffering nation due to the European financial crisis in 2009. The economy has unraveled with the possibility of an more severe crisis. After already obtaining a bailout from EU and IMF, it is believed that the nation will soon need a second bailout of 130 billion Euros.

1. Japan (233.1% Debt of GDP)

Although the GDP per capita is $33,994, unemployment rate is 4.6%, and the credit rating is AA3; Japan ranks first in this list because of its highest debt-GDP ratio. Despite this gigantic debt, it is not suffering as high as Greece and Portugal. Thanks to its higher number of domestic bondholders and healthy unemployment rate. This is commendable despite of frequent natural disasters that the country has faced in recent years.