Five Countries with the Highest Debt-to-GDP Ratios
November 12, 2024
A country’s debt-to-GDP ratio is a great indication of its reliance on sovereign debt.
Debt, when used in the right proportion, can spur growth, but if used in the wrong proportions, it can cause detrimental problems.
In this article, we list five countries with the highest debt-to-GDP ratios and explore the reasons why. Nomad Capitalist is a turnkey solution for offshore tax planning, dual citizenship, asset protection, and global diversification, find out more here.
Countries that Run into Debt Problems
As the name suggests, the debt-to-GDP ratio is measured with a country’s gross debt in the numerator divided by its gross domestic product in the denominator.
A debt-to-GDP ratio of ‘1’ indicates that its debt is equal to its GDP, meanwhile, ratios greater than ‘1’ indicate an over-reliance on debt, and a number below ‘1’ indicates low debt levels.
The debt-to-GDP ratio is also a good measure of the health of the economy.
However, in this complex world, many factors can affect a country and it cannot be simplified to a singular ratio. Some of these factors include the country’s economic growth prospects, the buyers of its debt, and its government’s spending plan.
Basically, what this implies is that it is okay to have a high debt-to-GDP ratio if your debt buyers are local or if they are repeat buyers, if you are borrowing heavily to sustain high levels of economic growth or if your government has a great spending plan of action.
On the other hand, if a country is borrowing increased amounts to incite growth in a stagnant economy, then the rating agencies will not view the country favourably because the country does not have a corresponding growth rate or a plan of action to effectively disperse its borrowed money.
Some other reasons contributing to higher ratios include an aging population which spells a heavier burden on healthcare and other social security systems. Governments might also want to fund big projects which is why ratios might rise.
At the end of the day, creditors will want their money paid back which is why smaller or more sluggish economies such as Greece come under fire for high debt-to-GDP ratios rather than Japan.
Countries that run into problems, unable to repay debt have the option to increase their taxes or reduce their government’s spending. Other measures include cutting interest rates to make it easier to borrow from commercial banks.
With that in mind, here are five countries that have faced serious debt issues.
5. Greece (125%)
Greece’s troubles were compared to that of the US during the Great Depression. The economy shrunk by almost a quarter, its credit rating was reduced to near-junk status and its government was left scratching its head.
The powers-that-be, namely the IMF and the ECB, tried to get Greece to conform to a set of, some say stringent, while some say necessary, reforms.
Greeks don’t like to pay taxes but they like to enjoy high pensions; these are the two areas that both the IMF and the ECB want the Greeks to change.
Greek politicians, on the other hand, pivoted their political agendas to the existing problem by blaming the EU and the outside world, promising the Greek people that they would get back to their old ‘Greek ways’.
That said, the government announced better news in the form of a surplus of around €1.5 billion in the first six months of 2023, up from a deficit of €3.8 billion for the same period in 2022. The full-scale return of tourism is no doubt a factor, but questions remain as to whether this progress can be sustained.
4. Sudan (139.8%)
Sudan has had to deal with many unfortunate circumstances that have drained its economy and forced its government to take on mountains of debt.
The most obvious problem is the civil wars and conflict that have cost millions of lives and caused many more civilians to flee the country. Many parts of the country have been destroyed, and it has proven extremely expensive to try and repair essential infrastructure.
This war led to economic sanctions which harmed the African nation’s ability to export oil.
On top of this, Sudan’s government has historically been guilty of corruption and economic mismanagement. These issues have all contributed to crazy levels of inflation of the Sudanese pound in recent years.
3. Singapore (147.1%)
Singapore has trillions of dollars worth of debt, but unlike the United States, the money isn’t being borrowed to finance budget deficits.
Instead, it issues special government securities as an investment to boost its stock and bond markets, and finance the long-term growth of its economy.
This is known as ‘good debt’, while borrowing from other nations to finance your spending is ‘bad debt’.
Singapore has a constitutional rule not to borrow money to finance its operating expenditures. It actually owns a lot more than it owes.
This should come as no surprise to anyone familiar with this city-state, known by many as the main financial hub of Asia.
While its debt-to-spending percentage is high on paper, that doesn’t tell the whole story. Its unique approach to government borrowing is one of the key reasons why this nation is thriving.
2. Lebanon (215%)
The story of Lebanon is an unfortunate one. It appears the country is forever embroiled in some form of turmoil or the other.
The war in Syria brought about the largest number of displaced Syrian refugees into the country. Adding to that, Lebanon’s intrinsic political and economic turmoil has exacerbated the country’s problems.
Because of the sizable Lebanese diaspora, one of the main contributors to the country’s GDP is remittances from around the world. These remittances are then deposited into local Lebanese banks that lend out to the government.
This is a country that is still rebuilding itself post-civil war which is why it has a chronic problem of running budget deficits every year.
In fact, the IMF has warned recently that in the absence of reform, the country will continue to see hyperinflation, and public debt will reach nearly 550% of GDP by 2027.
1. Japan (232%)
The country’s debt is almost double that of the other countries ranked on this list. Not only has the country’s growth stagnated for more than two decades, its Central Bank has even gone on to reduce interest rates to negative level territory.
Japan is still reeling from the ginormous asset bubble it funnelled in the 80s with disproportionate stock and land valuations.
When the bubble burst, trillions of dollars of wealth were lost and the subsequent political regimes have done little to solve the country’s problems since then.
Shinzo Abe, the former Prime Minister, and his host of ‘Abenomics’ reforms had renewed interest in the Japanese plight, but that too failed.
Abenomics was designed to reinvigorate a failing Japan; to undervalue its currency and make it more competitive against the likes of China and Korea. It was supposed to make Japanese exports more lucrative globally but that was not enough. Japan should have opened its door to immigration like Korea did.
Japan still manages to stay afloat because of its high reserves of domestic savings since the largest number of Japanese bond purchasers are local investors.
The sympathetic local buyers are willing to accept the low yields and keep the company afloat somehow.
Other High Debt-to-GDP Countries
Some other notable high debt-to-GDP ratios include that of the US, Jamaica and Bhutan (because of its reliance on Indian financial assistance). European nations such as Cyprus, Belgium and Spain also have troubling ratios.
Belgium, one of Europe’s more open countries, is the new entrant to the list and its problems have been exacerbated because of its government’s restrictive labour laws and tax regulations.
Countries With The Highest Debt To GDP Ratio: FAQs
Japan currently has the highest debt-to-GDP ratio, according to recent statistics.
Japan, Lebanon, Singapore, Sudan and Greece are the countries with the highest government debt-to-GDP ratios.
Turkmenistan and Afghanistan have the lowest debt-to-GDP ratios, according to recent data.
Turkmenistan, Afghanistan, Kuwait, The Democratic Republic of Congo, Hong Kong and Haiti all have a debt-to-GDP ratio below to 10%, according to recent data.
Japan’s 2023 debt-to-GDP ratio of 262% would appear to be the highest ever recorded by a sovereign state.
A 2021 Statista study found that Kentucky (22.78%), Hawaii (21.17%) and New York (20.07%) were the states with the highest debt-to-GDP ratio.
Navigating Debt and Wealth
High debt-to-GDP ratios are not just financial figures; they tell a complex story of how nations manage debt, economic health and long-term resilience.
While countries like Singapore use debt strategically to fuel growth, others face economic challenges that come from political troubles and stagnant reforms: for individuals looking to secure financial stability, these insights are invaluable.
At Nomad Capitalist, we can help you create a tailored, resilient plan for tax reduction, asset protection and global diversification – empowering you to keep your wealth secure wherever opportunity takes you.
Ready to live a life of financial and personal freedom?
Reduce your taxes legally while safeguarding your wealth for future generations with a holistic Nomad Capitalist Action Plan.
Get Tips to Reduce Taxes and Build Freedom Overseas
Sign up for our Weekly Rundown packed with hand-picked insights on global citizenship, offshore tax planning, and new places to diversify.

Do I Have to Pay US Taxes on the Sale of My Primary Residence?
To most people, a home represents far more than four walls, a collection of rooms and, if you’re lucky, a plot of land. Your home is famously your ‘castle’, to quote 17th-century judge Sir Edward Coke. Home is a sanctuary, an escape from the madding crowd, a place of refuge where memories are made. It […]
Read more

Will My Bank Still Need to Report My Financial Information to the IRS Under FATCA?
As a US citizen, you must report your financial information to the government wherever you go. However, President Trump has indicated a move away from taxing people based on citizenship towards a taxation model based on where income is earned. President Trump has not yet provided specific details on what he intends to do with […]
Read more

How to Escape Rising US Home Insurance Costs
For most people, their home is their biggest asset, so ensuring it is properly protected is non-negotiable. But here’s the problem: home insurance costs in the US are skyrocketing. While a once-off price increase of a few per cent every once in a while is manageable, prices in the US have seen increases of nearly […]
Read more
