The most developed countries, often measured by high-income status or membership in groups like the OECD or G7, carry significant national debt, typically expressed as a percentage of their GDP to reflect their ability to repay.
Based on recent data, here’s a breakdown of the government debt-to-GDP ratios for key advanced economies in 2023, with some projections for 2025.
Japan: 255% of GDP, the highest among developed nations, equating to roughly $10.2 trillion. Persistent deficits and an aging population drive this, though low-interest intergovernmental borrowing mitigates immediate pressure.
United States: 123% of GDP, approximately $36.6 trillion as of March 2025. Large military budgets, tax cuts, and stimulus programs (e.g., COVID-19 relief) contribute.
Italy: 137% of GDP, around $2.8 trillion. High public spending and slow growth exacerbate its debt burden.
Singapore: 175% of GDP, though this is less alarming due to strong fiscal reserves and economic stability.
France: 128.5% of GDP, roughly $3.1 trillion. High social spending and economic recovery measures play a role.
Canada: 129.6% of GDP, driven by pandemic-related spending and infrastructure investments.
United Kingdom: 109.4% of GDP, about $3.65 trillion, fueled by public services and economic stimulus.
Germany: 66% of GDP, the lowest among G7 nations, projected to drop to 58% by 2029, reflecting fiscal discipline.
Globally, advanced economies average a debt-to-GDP ratio of 110%, compared to 74% for emerging economies. Total global public debt reached $92 trillion in 2022, with developed nations like the US, Japan, and France accounting for a significant share.
The US alone holds about 22.9% of its $36.6 trillion debt in foreign hands, with Japan ($1.1 trillion) and China ($749 billion) as top creditors.
High debt levels don’t always signal instability – countries like Japan and the US benefit from issuing debt in their own currencies, allowing flexibility. However, rising interest rates and aging populations could strain future budgets, especially for nations with ratios above 100%.
High debt can reflect necessary investments (e.g., infrastructure), and low growth may drive debt rather than vice versa, as seen in debates around Rogoff and Reinhart’s 90% threshold.