According to a report from the Central Intelligence Agency, in December 2013 it was $ 9.577 billion, which is almost 4 times the country's GDP, which is equal to $ 251 billion. In other words, for every dollar of GDP, there is $ 4.36 in debt. At first glance, these statistics are shocking, since this indicator is the third in the world after the European Union and the United States, and the gross domestic product of these giants of the world economy is many times higher than the British one, which means that the ratio of external debt to GDP is completely different. However, the problem of Britain's external debt is by no means a primary one and is not being discussed as much as many other economic topics.
Whom did the British owe?
If we consider the distribution of debt concentration, then the largest part of it lies with commercial banks in Great Britain (55%), 28.7% - in the non-financial sector, 8% - on the state and direct investments, but the Central Bank modestly pulls its burden of 0.3 %. The more significant part of the debt is borne by the country's banking sector, the more significant is the share of short-term debt. And the preponderance in the distribution of repayment debts towards short-term debts increases the country's risks. In total, the short-term debt of Great Britain is 68.3%, more only in Japan: 77.8%. Thus, the overall picture is not at all positive.
In general, such a ratio of GDP and external debt was observed, for example, before the First World War. Naturally, the geopolitical situation today, as well as the disastrous state of many large economies of the world, threaten to result in a major crisis or even an armed conflict, the likelihood of which, however, decreases with the development of integration processes and increasingly close ties between countries. The United Kingdom must manage a difficult course: narrowing government deficits and helping to reduce household debt - without limiting GDP growth.
Economists are slow to draw conclusions
Despite the rather depressing statistics, it cannot be said that economists are sounding the alarm everywhere because of the large debts of Great Britain.
Debt structure
Consider the structure of the UK's external debt:
- USA - € 578.6 billion
- Germany - € 379.3 billion
- Spain - € 316.6 billion
- France - € 209.9 billion
- Ireland - € 113.5 billion
- Japan - € 122.7 billion
The largest lenders are Germany, Spain and the United States. However, the likelihood of bankruptcy is low as the country owns a significant amount of high quality assets.
A more or less serious threat to the banking system of Great Britain is the debt problems of Ireland, Spain and Italy. However, these countries receive support from other EU members and also do not plan to fall into a deep systemic crisis.
Expert opinion
The correspondent of the information agency "Business News" discussed the financial problems of Great Britain with the independent expert in the field of international economic relations Ruslan Bulatov. According to the interlocutor of "Business News", Great Britain will cope with the payment of debt obligations.
DN: Is it possible to talk about a desperate situation in which the UK found itself?
Ruslan Bulatov: I doubt that the experts who claim the collapse of the UK economy are right. The thesis about the negative impact of large public debt has no direct evidence, because history clearly shows the capabilities of developed countries, even those living in debt. Thus, the United States has a debt of $ 18 trillion, while its economy is growing steadily. There is a freely convertible currency in the UK - thus the country's authorities will be able to amortize their debt through inflation and quantitative easing, by turning on the printing press - developed Western countries will remain on horseback for a long time, all forecasts about the imminent collapse of their economies are nothing more than horror stories ... Now, rather, you need to think about
Western economists sounded the alarm by examining comparative tables with indicators of the external debt of the countries of the world.Experts are not so much afraid of the huge amounts themselves, as their ratio to the gross domestic product, that is, a macroeconomic indicator reflecting the market value of all final goods and services produced per year in all sectors of the economy on the territory of the state for consumption, export and accumulation.
Today, 9 countries have external debt exceeding 300% in relation to GDP. Japan was ahead of all, with 400% of GDP, followed by Ireland, with 390% of GDP. This is followed by Singapore, Portugal, Belgium, the Netherlands, Greece, Spain. Obviously, the US debt cannot be called small - 233% of GDP. But Russia has 65% of GDP.
Against the backdrop of the macroeconomic crisis, economists note that the ranks of the middle class in the West have begun to shrink. They also warn of impending inflation and even hyperinflation. The world's central banks are preparing to counter this phenomenon. In addition, more than $ 12 trillion represents credit funds, that is, it belongs to the sphere of debt obligations.
Truth. Roux wrote earlier that the US national debt is much higher than the official amount - 5 times, according to a senior researcher at the Cato Institute (Washington) Michael Tannere. Moreover, it continues to grow. If the government estimates this debt at a record $ 18 trillion, then in reality it is $ 91 trillion. According to Tanner, even the officially underestimated US government debt is 101% of the country's GDP.
Let us recall that external debt is a part of the total debt of economic entities in the country attributable to foreign creditors. Subdivided into state and corporate. According to the Cabinet of Ministers of the Russian Federation, the state debt of Russia is 10% of GDP.
01/30/2016 at 10:37 PM · Pavlofox · 8 410
Debt of the countries of the world for 2015
Economic and political instability, budget deficit forces the governments of countries to resort to borrowed funds. Borrowed money from other countries, international funds and investors helps to increase financial opportunities and replenish the country's resources. But on the other hand, they increase the risks of an economic crisis. External debt is the difference between borrowed funds and payments on interest and principal. It is measured in dollars for ease of comparison with GDP figures. In many countries, this debt has been accumulating for decades. Its increase was promoted by the world crisis of 2007-2008. But the external debt of the countries of the world for 2015 broke all records. The leaders among the debtors are the countries of the Eurozone. The first position is held by the largest economy in the world - the United States.
10. Canada | 1.49 trillion dollars
Opens the top ten countries in the world with the largest foreign debt.
The country's debt began to grow rapidly during the 2008 crisis. Since then, the country has owed the world $ 1.49 trillion to cover the budget deficit and stimulate the economy. If you divide this amount, then for every Canadian there will be 39 thousand dollars in debt. In 2015, Canada experienced an economic downturn and the country's GDP decreased. The main position in the economy is occupied by the logging and oil-extracting industries. Moreover, oil is produced using a much more complex and expensive method, unlike the traditional one. The fall in oil prices forced industrialists to cut production costs. Primarily due to job cuts. The state was forced to resort to loans to provide social guarantees to the population and stabilize the economic situation.
9. Spain | 1.5 trillion dollars
on the ninth line of the rating. The external debt of this country has reached the highest value in history. If we divide it by per capita, then there will be 31 thousand dollars for each. And if we divide the debt by interest, then each will have more than 720 euros, and this despite the fact that the average salary in the country is slightly more than 650 euros. The government allocates more funds to pay off debt than to combat unemployment and social programs. At the same time, GDP grew by 3% and experts predict the same growth in 2016. At the end of 2015, the country's total external debt was estimated at $ 1.5 trillion.
8. Brazil | 1.8 trillion dollars
She owed the world about $ 1.8 trillion. For one of the largest countries in Latin America, 2015 was marked by an economic decline in production by almost 4%, a surge in inflation and unemployment. Falling prices for raw materials (and this is mainly agriculture), a decrease in demand from the main trading partner of China, an unfavorable political situation were the prerequisites for an increase in the state debt of the state. Investors are trying not to invest in Brazilian bonds. Nevertheless, the country's foreign exchange reserves are strong enough to avoid problems with servicing external debt.
7. France | 2.3 trillion dollars
The national debt of another state in the Eurozone is growing - France... For 2015, the loan amount was $ 2.3 trillion. Low consumer activity, high unemployment rate of 10.5% and virtually no investment hinder the development of the economy. But they do not interfere with increasing public debt, which in 2015 amounted to just over 95% of GDP. Each Frenchman owes 34 thousand euros and this debt continues to grow.
6. Italy | 2.5 trillion dollars
With a debt of $ 2.5 trillion, it was in the top ten countries with the largest loan. The government is not going to stop increasing the amount of borrowed funds. Thus, she is trying to stabilize the economic situation in the country. Each citizen of the country has 41 thousand euros of debt, which is more than 130% of GDP. Experts see the problem in the unfavorable business climate created by the state, in the high level of corruption, in the absence of reforms capable of changing the current power structure. Despite the fact that Italy is collecting debts to raise the economy, the latter is not growing.
5. Great Britain | 2.52 trillion dollars
Economy Great Britain considered one of the most developed in the world. But in 2015, the country's debt surpassed the $ 2.52 trillion mark. Its main part is made up of short-term loans from commercial banks. Most of all, Great Britain owes the USA and Germany, France and Spain. Due to the large reserve of gold and foreign exchange assets, experts do not sound the alarm and do not talk about the economic crisis. The British pound sterling, being a convertible currency, is firmly in place.
4. Germany | 2.6 trillion dollars
It is located one step away from the three largest debtors in the world. The amount owed by the country is estimated at $ 2.6 trillion.
But despite the relatively large debt, the German economy remains stable. As for the ratio of debt to GDP, the country has the highest indicator by these criteria in the world - more than 80%.
3. China | 3.1 trillion dollars
(China) is the world's largest creditor and, paradoxically, it is also one of the main debtors according to 2015 data. But China is considered a "good" debtor because its huge reserves of gold and foreign exchange ensure that the debt is paid on time. The amount of China's debt at the beginning of 2016 was $ 3.1 trillion.
2. Japan | 12.2 trillion dollars
- one of the most scrupulous countries in terms of finance and became one of the largest debtors in the world at the end of 2015. Its debt today is $ 12.2 trillion, and it is growing more and more every day. In the last year alone, its amount has increased by more than $ 1.4 trillion. The accident at the Fukushima nuclear power plant after the 2011 tsunami had a very strong impact on the country's economy. The state was forced to increase the debt to eliminate the consequences.
1. USA | $ 19.75 trillion dollars
occupy the first line of the rating. The most developed economy and one of the largest countries also has the largest external debt, which is estimated at $ 19.75 trillion. This figure only says that Americans do not save, and their expenses sometimes exceed their income.
The main US investors are China and Japan. These countries, whatever the level of the United States' debt, will buy their bonds so that America can pay for their goods with the proceeds. Russia is also one of the ten largest creditors in America.
What else to see:
Japan's national debt in March renewed its record and reached 1,053,357,200,000,000 yen (1.053 quadrillion yen = $ 8.78 trillion).
According to the International Monetary Fund, by the end of 2015, the ratio of the national debt to the country's GDP may exceed 246%. The fact is that the Japanese authorities do not intend to stop and already at the end of the current fiscal year (which began in April) intend to increase the amount of public debt to 1.167 quadrillion yen.
The current value of public debt / GDP excluding adjustments is 215% (nominal GDP for 2014 was 0.499 quadrillion yen).
And although international experts warn the Japanese government that such a level of debt may be dangerous for the country, low rates allow it to spend minimal amounts on its servicing.
Since debt can be refinanced at very low rates, the risks of renewing it are extremely low, which allows borrowers, who would normally be considered bankrupt, to remain solvent for much longer than they actually could. In general, if a debt can be permanently renewed at a zero rate, it becomes not a significant problem. No one can go bankrupt, and debt becomes de facto eternal.
The Japanese experience perfectly illustrates this phenomenon. Public debt exceeds 200% of GDP and seems overwhelming. But servicing this debt costs only 1–2% of GDP, keeping Japan from bankruptcy.
The United States of America remains the leader in the ranking of countries in terms of the volume of external debt. This is stated in the message of the analytical information service of the International Organization of Creditors (WOC), which conducted a study of the volume of public debt in different countries of the world and forecasts for the growth of debt, the correspondent reports.
In 2010, the total public debt of the countries of the world exceeded $ 41 trillion, but at that time the growth in the volume of obligations could be justified by the desire of governments to overcome the consequences of the crisis as soon as possible and return to pre-crisis levels. Statistical reports for 2011 show a positive movement in various economic indicators, including. However, the government debt of the 50 largest economies in the world also rose to reach $ 55 trillion. The aggregate external debt of these states has exceeded $ 65 trillion. Thus, economic growth was driven by government injections, including through borrowings from non-residents.
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Place in 2011 |
Place in 2010 |
External debt, USD billion, 2011 |
External debt, USD billion, 2010 |
The change, % |
External debt / |
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Great Britain |
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Germany |
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Netherlands |
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Ireland |
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Australia |
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Switzerland |
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Source: CIA data, WOC calculations
VWOCnote that l The leaders of the rating of countries in terms of the volume of external debt in most cases retain their last year's positions. The external debt of the United States became equal to the volume of GDP at the end of 2011. But if we consider the rating by this indicator, then the United States is far from being the leader. The external debt of Ireland is almost 11 times more than the volume of GDP, the UK - 5 times, the Netherlands and Hong Kong - 4 times. Only Japan has this indicator below 50%, but this is probably the only positive moment in the debt ratings for this country. The level of Japanese government debt is off the charts, as seen in Table 1. 2.
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Place in 2011 |
Place in 2010 |
Volume of goc. debt (public debt), USD billion, 2011 |
The volume of state. debt (public debt), USD billion, 2010 |
The change, % |
Public debt / |
|
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Germany |
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Great Britain |
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Brazil |
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Netherlands |
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Compared to 2010 results, everyone in the top ten remained where they were, with the exception of the UK and China. The latter managed to reduce sovereign debt by 5%, which made it possible to swap places with Britain, which continues to increase its debts (+ 17%). In the top ten, China also has the best public debt to GDP ratio (25.8%).
The US national debt continues to grow and its ratio to GDP has already exceeded 100%. But here it is necessary to understand that the US economy is the largest in the world, and in addition, the US has opportunities to generate share premium. This means that even with the continuing trend of growth in the debt burden, the American economy still has room for growth.
The highest level of debt burden was recorded in Japan, where the volume of public debt to GDP is 226%. The country continues to struggle with the consequences of the tsunami mainly due to domestic financial injections in the national currency, which explains such a high figure. Greece is behind Japan in this indicator. In third place is Italy, which uses every opportunity to avoid the fate of Greece. At the end of 2011, the GDP of Italy grew by 7%, and that of France and Germany by 8% and 9%, respectively. On the whole, 2011 was quite successful for the Eurozone countries. Economic growth was observed in all countries except Greece (-1%).
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State debt per capita, USD, 2011 |
State debt per capita, USD, 2010 |
The change, % |
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Ireland |
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Singapore |
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Norway |
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Germany |
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Netherlands |
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Switzerland |
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Great Britain |
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Finland |
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Portugal |
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Source: IMF data, WOC calculations
The highest level of debt burden was recorded in Japan - $ 105 thousand of government debt falls on one resident of the country. Ireland, which ranks second, has this figure more than 2 times lower ($ 49.9 thousand). As can be seen from the rating, over the past year, the debt burden in the top twenty has grown by more than 10% on average. Except for Sweden and Portugal, where there is a slight decrease in this indicator (-4% and -2%, respectively).
Russia is in good positions in all three indicators. The level of external debt to GDP does not exceed 30%, its growth over the year is only 6%. The level of public debt is even lower and does not exceed 10% in relation to GDP, and for every Russian there are 1247 dollars. As you can see from the table. 4 almost all debt is covered by international reserves.
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Volume of international reserves, USD billion |
Reserve coverage of external debt,% |
Reserve coverage of public debt,% |
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Saudi Arabia |
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Brazil |
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Switzerland |
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Korea, republic |
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Germany |
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Singapore |
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Indonesia |
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Malaysia |
