Annual External Debt Ratings By Country

External debt plays a crucial role in a country's financial health, reflecting its borrowing from international markets to fund development, infrastructure, or bridge budget deficits. This analysis highlights the annual external debt rankings of countries, showcasing economic powerhouses and emerging economies.

Which country has the highest external debt?

The United States ranks first with an external debt of $20.27 trillion, reflecting its extensive global trade ties, investments, and borrowing capacity. The United Kingdom follows with $8.72 trillion, emphasizing its role as a global financial hub, while France ranks third with $6.35 trillion.

How does external debt relate to a country’s economy?

External debt is often linked to economic activity and GDP. Economically developed nations like the United States, the United Kingdom, and Japan manage higher debt levels due to their substantial GDPs and robust financial systems. However, higher debt can pose risks, especially for countries with weaker economies or limited repayment capacity.

Which countries have moderate levels of external debt?

Countries such as China ($2.03 trillion) and Canada ($2.12 trillion) showcase moderate external debt levels relative to their economic scale. Emerging economies like India ($555 billion) and Russia ($500 billion) have managed their external debt while maintaining growth trajectories.

Which countries have the lowest external debt?

Countries with minimal external debt include Afghanistan ($145 million), Turkmenistan ($540 million), and Belize ($1.32 billion). These figures often reflect limited economic activities, smaller GDPs, or restricted access to international credit markets.

How does external debt impact developing nations?

Developing nations often use external debt to finance critical infrastructure and development projects. However, high levels of debt can lead to dependency on international lenders and vulnerability to economic shocks. Countries like Bangladesh ($50 billion) and Ethiopia ($30 billion) exemplify nations balancing growth aspirations with external borrowing constraints.

Which regions dominate external debt rankings?

The Americas, Europe, and East Asia dominate external debt rankings. The United States, United Kingdom, and Japan represent developed regions with significant borrowing capacities. Meanwhile, emerging economies in Asia, Africa, and Latin America, such as India and Brazil, maintain moderate to high external debt levels relative to their economic scale.

What role does external debt play in global finance?

External debt is vital for global finance, enabling countries to leverage international markets for economic growth and development. However, unsustainable debt levels can lead to economic instability, emphasizing the need for prudent fiscal management and debt servicing capabilities.

FAQs about External Debt

What is external debt?

External debt refers to the total amount of money a country owes to foreign creditors, including international organizations, other governments, and private lenders.

How is external debt measured?

External debt is typically measured in USD and compared to a country’s GDP to assess sustainability and economic health.

Why do countries incur external debt?

Countries borrow externally to finance development projects, stabilize their economies, and meet budgetary needs.