A rapid increase in government debt is a major cause of concern. Generally, the higher a country’s debt-to-GDP ratio is, the higher chance that the country could default on its debt, therefore creating a financial panic in their markets.
The World Bank published a study showing that countries that maintained a debt-to-GDP ratio of over 77% for prolonged periods experienced economic slowdowns.
COVID-19 worsened the debt crisis that has been brewing since the 2008 global recession.
A report from the International Monetary Fund (IMF) shows that at least 100 countries will have to reduce expenditures on health, education, and social protection.
Here are the top 20 of the most indebted nations in the World according to the World Bank 2021 Annual Report;
- USA ($18,286 trillion)
- UK ($7,499 trillion)
- France ($5,250 trillion)
- Germany ($5,084 trillion)
- Netherland ($4,124 trillion)
- Luxembourg ($3,900 trillion)
- Japan ($3,408 trillion)
- Italy ($2,285 trillion)
- Ireland ($2,236 trillion)
- Spain ($2,036 trillion)
- Canada ($1,791 trillion)
- Switzerland ($1,699 trillion)
- Australia ($1,563 trillion)
- China ($1,437 trillion)
- China Hong Kong ($1,416 trillion)
- Singapore ($1,300 trillion)
- Belgium (($1,194 trillion)
- Sweden ($938 billion)
- Austria ($629 billion)
- Norway ($623 billion)
TOP 10 MOST INDEBTED AFRICAN NATIONS TO CHINA, IMF, AND WORLD BANK.
- Angola ($25 billion)
- Ethiopia ($13.5 billion)
- Kenya ($7.9 billion)
- Republic of Congo ($7.5 billion)
- Sudan ($6.4 billion)
- Zambia ($6.5 billion)
- Cameroon ($5.5 billion)
- Nigeria ($4.8 billion)
- Ghana ($3.5 billion)
- DR. Congo ($3.4 billion)
Meanwhile, there are countries such as Jersey and Guernsey which have no national debt, so they pay no interest.
All this started with the Napoleonic wars when the government borrowed money to fund the war. Income tax was then created to pay the interest and the capital has just gone on growing and growing.