Visualizing The Snowball Of Government Debt – ValueWalk Premium
Snowball Of Government Debt

Visualizing The Snowball Of Government Debt

Over the last five years, markets have pushed concerns about debt under the rug.

While economic growth and record-low interest rates have made it easy to service existing government debt, it’s also created a situation where government debt has grown in to over $63 trillion in absolute terms.

Q3 hedge fund letters, conference, scoops etc

The global economic tide can change fast, and in the event of a recession or rapidly rising interest rates, debt levels could come back into the spotlight very quickly.

Snowball Of Government Debt

The Debt Snowball

Today’s visualization comes to us from and it rolls the world’s countries into a “snowball” of government debt, colored and arranged by debt-to-GDP ratios. The data itself comes from the IMF’s most recent October 2018 update.

The structure of the visualization is apt, because debt can accumulate in an unsustainable way if governments are not proactive. This situation can create a vicious cycle, where mounting debt can start hampering growth, making the debt ultimately harder to pay off.

Here are the countries with the most debt on the books:

Rank Country Debt-to-GDP Ratio (2017)
#1 Japan 237.6%
#2 Greece 181.8%
#3 Lebanon 146.8%
#4 Italy 131.8%
#5 Portugal 125.7%
#6 Sudan 121.6%
#7 Singapore 111.1%
#8 United States 105.2%
#9 Belgium 103.4%
#10 Egypt 103.0%

Note: Small economies (GDP under $10 billion) are excluded in this table, such as Cabo Verde and Barbados

Japan and Greece are the most indebted countries in the world, with debt-to-GDP ratios of 237.6% and 181.8% respectively. Meanwhile, the United States sits in the #8 spot with a 105.2% ratio, and recent Treasury estimates putting the national debt at $22 trillion.

Light Snow

On the opposite spectrum, here are the 10 jurisdictions that have incurred less debt relative to the size of their economies:

Rank Country Debt-to-GDP Ratio (2017)
#1 Macao (SAR) 0.0%
#2 Hong Kong (SAR) 0.1%
#3 Brunei 2.8%
#4 Afghanistan 7.0%
#5 Estonia 9.0%
#6 Botswana 14.0%
#7 Russia 15.5%
#8 Saudi Arabia 17.2%
#9 DRC 18.1%
#10 Paraguay 19.5%

Note: Small economies (GDP under $10 billion) are excluded in this table, such as Timor-Leste and Solomon Islands

Macao and Hong Kong – both special administrative regions (SARs) in China – have virtually zero debt on the books, while the official country with the lowest debt is Brunei (2.8%).

Article by Visual Capitalist

Saved Articles

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Here’s a Tip: Read What Professional Investors Read

ValueWalk Premium is for investors looking to improve their investment process AND keep up-to-date on the latest industry trends.

It’s THE resource for value investing and hedge funds. 📈

And with a free three-day trial and $29.99 per month thereafter, it’s a value in its own right.

Sign up now. 👇