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The world's top 25 debt-ridden nations

Last updated on: February 16, 2011 09:42 IST

The world's top 25 debt-ridden nations

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The global financial tsunami that ripped through the world left many an economy teetering on the brink. With banks, industries and businesses going belly up by the dozens and jobs being lost by the thousands the world over, governments swung into action to stabilise the situation through increased spending and provision of fiscal stimuli.

But increased spending in tough times could only be funded through heavy borrowings from foreign lenders, leading to nations' external debt going through the roof.

External debt (or foreign debt) is the total amount of private and public foreign debt (capital plus interest) that a country owes to its creditors outside the country.

This debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund and the World Bank.

However, bigger nations have larger debts owing to the extent of the financial stimulus they offer to the domestic industry and the amount of pump-priming they get into.

To put things into perspective, one of the best ways to measure a country's debt position is to compare its gross external debt to its GDP. This ratio helps determine if the country is in a position to repay its debt or is there likelihood that it may default.

For the record, the total external debt in the world stands at close to $60 trillion.

So which are the world's most indebted nations? According to the latest available World Bank statistics, here are the world's top 25 nations, plus India, in terms of external debt.

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Image: the total external debt in the world stands at around $60 trillion.
Photographs: Reuters
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India: $295.8 billion

India ranks 28th in the world in terms of the level of external debt it owes. India's external debt stood at $295.8 billion as of September-end 2010, representing an increase of 12.8 per cent over the level of $262.3 billion at end-March 2010.

Debt as in percentage of GDP: 19%

Per capita debt: $200

While long-term debt increased by 9.5 per cent to $230 billion, short-term debt registered a sharp increase of 26 per cent to $66 billion.

The total external debt increased by an absolute amount of $33.5 billion, of which $6.3 billion (roughly 19 per cent) could be ascribed to a 'valuation effect' arising due to the depreciation of the dollar against other major international currencies.

The impact of dollar devaluation on India has expectedly been sharp, given that over half of India's external debt is dollar denominated.

External commercial borrowings, mainly by the Indian corporate sector seeking to benefit from the arbitrage between domestic and international interest rates, are an important reason for the rapidly increasing external debt.

The share of ECBs in total external debt stood at 28 per cent, followed by Non-Resident Indian deposits (17 per cent) and multilateral debt (16 per cent).

It is the sharp increase in short-term debt that is a cause for some concern, especially with the current account deficit approaching 4 per cent of the gross domestic product.

Click NEXT to check out the world's top 25 countries with highest external debt . . .  


Image: India.
Photographs: Reuters
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1. The United States of America: $14.393 trillion

America, the world's richest and largest economy, is also the world's biggest debtor. It has a gargantuan gross external debt of $14.393 trillion as per World Bank figures.

Debt as in percentage of GDP: 94%

Per capita debt: $43,758

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Image: The United States.
Photographs: Reuters
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2. The United Kingdom: $9.088 trillion

Britain has a gigantic external debt to the tune of $9.088 trillion.

Debt as in percentage of GDP: 416%

Per capita debt: $147,060

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Image: The United Kingdom
Photographs: Reuters
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3. Germany: $5.028 trillion

Germany, one of the world's manufacturing powerhouses and Europe's 'strongest' economy, has an external debt of $5.208 trillion.

Debt as in percentage of GDP: 155%

Per capita debt: $63,493

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Image: Germany
Photographs: Reuters
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4. France: $5.021 trillion

Most of the world's developed nations have clocked up huge debts. France too has a gross external debt of $5.021 trillion.

Debt as in percentage of GDP: 188%

Per capita debt: $80,209

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Image: France
Photographs: Reuters
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5. The Netherlands: $3.733 trillion

The Netherlands has an external debt of $3.733 trillion.

Debt as in percentage of GDP: 470%

Per capita debt: $226,503

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Image: The Netherlands.
Photographs: Reuters
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6. Spain: $2.410 trillion

Spain is yet another European economy that has been buffeted around in the harsh recessionary winds. Its external debt stands at $2.410 trillion.

Debt as in percentage of GDP: 165%

Per capita debt: $52,588

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Image: Spain
Photographs: Reuters
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7. Italy: $2.328 trillion

Italy has worked up a gross external debt of $2.328 trillion.

Debt as in percentage of GDP: 101%

Per capita debt: $39,234

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Image: Italy.
Photographs: Reuters
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8. Ireland: $2.287 trillion

The Irish economy is in the doldrums. Its gross external debt now stands at $2.287 trillion.

Debt as in percentage of GDP: 1,267%

Per capita debt: $567,805

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Image: Ireland.
Photographs: Reuters
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9. Japan: $2.132 trillion

Asian economic giant Japan has an external debt of $2.132 trillion.

Debt as in percentage of GDP: 42%

Per capita debt: $16,714

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Image: Japan.
Photographs: Reuters
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10. Luxembourg: $1.994 trillion

Luxembourg, a small nation landlocked by Belgium, France and Germany, is a prominent financial centre. Its gross external debt stands at $1.994 trillion.

Debt as in percentage of GDP: 3,854%

Per capita debt: $4,028,283

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Image: Luxembourg.
Photographs: Reuters
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11. Belgium: $1.354 trillion

Belgium has a gross external debt of $1.354 trillion.

Debt as in percentage of GDP: 267%

Per capita debt: $126,188

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Image: Belgium.
Photographs: Reuters
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12. Switzerland: $1.339 trillion

Tourist-attraction and a major global financial centre, Switzerland, has an external debt of $1.339 trillion.

Debt as in percentage of GDP: 271%

Per capita debt: $182,899

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Image: Switzerland.
Photographs: Reuters
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13. Australia: $920 billion

Australia has an external debt of $920 billion.

Debt as in percentage of GDP: 92%

Per capita debt: $42,057

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Image: Australia.
Photographs: Reuters
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14. Canada: $833.80 billion

Canada, which was relatively less impacted by the global economic recession as compared to its mighty neighbour, the Untied States, has an external debt of $833.80 billion.

Debt as in percentage of GDP: 62%

Per capita debt: $24,749

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Image: Canada
Photographs: Reuters
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15. Austria: $808.90 billion

Austria has a huge external debt of $808.90 billion.

Debt as in percentage of GDP: 212%

Per capita debt: $97,411

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Image: Austria.
Photographs: Reuters
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16. Sweden: $669.10 billion

Sweden, which ranks high on the competitive and human development indices, has a gross external debt of $669.10 billion.

Debt as in percentage of GDP: 165%

Per capita debt: $72,594

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Image: Sweden
Photographs: Reuters
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17. Hong Kong: $655.10 billion

Hong Kong is a major East Asian financial, trading and transport hub, with one of the world's busiest ports. Its gross external debt is $655.10 billion.

Debt as in percentage of GDP: 311%

Per capita debt: $92,725

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Image: Hong Kong
Photographs: Reuters
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18. Denmark: $607.40 billion

Denmark's gross external debt stands at $607.40 billion.

Debt as in percentage of GDP: 196%

Per capita debt: $110,216

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Image: Denmark
Photographs: Reuters
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19. Greece: $552.80 billion

Greece is another shaky economy in Europe. It is reeling under external debt of $552.80 billion.

Debt as in percentage of GDP: 161%

Per capita debt: $51,483

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20. Norway: $548.10 billion

Norway's gross external debt is at $548.10 billion.

Debt as in percentage of GDP: 143%

Per capita debt: $113,174

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Image: Norway.
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21. Portugal: $507 billion

Portugal is another country in the Eurozone facing a severe crisis. According to some analysts, Portugal is one of the riskiest nations in the Eurozone. Its gross external debt stands at $507 billion.

Debt as in percentage of GDP: 223%

Per capita debt: $47,632

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Image: Portugal.
Photographs: Reuters
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22. Russia: $369.20 billion

One of the fast growing BRIC nations, Russia has a gross external debt of $369.20 billion.

Debt as in percentage of GDP: 30%

Per capita debt: $2,611

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Image: Russia.
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23. Finland: $364.90 billion

Finland too has a fairly high external debt at $364.90 billion.

Debt as in percentage of GDP: 153%

Per capita debt: $68,180

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Image: Finland.
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24. China: $347.10 billion

The world's fastest growing economy has an external debt of $347.10 billion, which is negligible when one takes into account the fact that its foreign exchange reserves alone stand at more than $2 trillion.

Debt as in percentage of GDP: 7%

Per capita debt: $260

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25. South Korea: $333.60 billion

South Korea, one of Asia's major and growing economies, has a gross external debt of $333.60 billion.

Debt as in percentage of GDP: 40%

Per capita debt: $6,842


Image: South Korea.
Photographs: Reuters
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