December 13, 2012

Which Country Is In The Most Debt

Recent announcements have confirmed that the Eurozone is about to head into a double-dip recession, after the GDP fell by 0.1% in the third quarter. When it seems like the whole globe is sinking further into debt, which countries are really suffering from this economic crisis?

The United Kingdom

In the developed nations, the UK has the accolade of largest debt-to-GDP ratio. With that in mind, it’s shocking that the economy is keeping relatively stable. This is largely thanks to Britain’s independent state of mind.

By refusing to join the Eurozone, the UK has avoided the worst of Europe’s financial troubles. Britain has kept a firm hold of its Aaa credit rating, and is determined to keep their own fiscal crisis secure.

Germany

Lauded as the largest financial stronghold in Europe, Germany is a bastion of debt stability and now it’s hoping to prop up the entire Eurozone. Good luck, Germany!

When Greece was on the verge of economic collapse in 2011, the EU granted them 45 billion euros to keep the country afloat. Germany footed a large portion of this bill.

This country’s economy is going strong for now and its unemployment rate is exceptionally low. Even with their perfect credit rating, Germany’s governmental debt still remains at $2.79 trillion.

The United States

Since 2005, US debt has doubled to $12.8 trillion. Still rated as a perfect Aaa, the US remains in difficult economic times that have only got worse after a decade of increased government spending.

Portugal

Another country which was bailed out in 2011, Portugal received $104 billion to prop them up through difficult economic times. Moody’s now classes Portugal as Ba3, which is lower than junk status.

Ireland

In 2005, Ireland was going through an economic golden age. It had the lowest unemployment levels than any developed country in the world. Unsurprisingly, when the global recession hit, this small country began to suffer. Ireland’s debt has increased by a staggering 500% since 2001 and Moody’s has relegated this formerly stable country to junk status.

Italy

Unfortunately for Italy, its public debt has been exacerbated by terrible economic growth. To avoid a financial crisis, the government passed austerity measures which would cost the average household $1,500 a year, for three years. Italy’s credit rating has recently been downgraded from A2 to A3. By clicking here, you can find out more about how credit ratings are established.

Greece

For a long time now, all news about Greece has been bad news. This country has been bailed out not once, but twice, in the last few years. The second package cost the Eurozone $172 billion. For the country itself, Greece has been implementing new austerity measures, which have resulted in mass protest from thousands of citizens.

Japan

With a total government debt of $13.7 trillion, Japan is the most indebted country on our list. Japan has avoided a crisis similar to Greece and Portugal by maintaining a good employment rate. It’s currently thought that Japan will double the national sales tax, as this is thought to be an answer to reducing Japan’s debt.

Written by Jamie Knop, a blogger and writer.

No comments:

Post a Comment