Debt Levels Relative to GDP of PIIGS and Some Other Major Countries

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Debt to GDP of PIIGS plus Major Countries

For some perspective on the European sovereign debt crisis, this chart illustrates the forecasted 2012 debt to GDP ratio for each of the PIIGS (red bars) plus a handful of today's major economies (blue bars).
 
120625 Chart of the Day - Debt Levels Relative to GDP 
While the PIIGS are currently enduring relatively high debt loads, it is noteworthy how some of the relatively safe nations/bond markets (e.g. United State and Germany) are not far behind.
These relatively high debt loads are of concern as they could lead to higher taxes sometime in the future and can risk fiscal crises if bond holders sense an increasing risk of default.
The current crisis in Europe provides a clear example of the bond market's reaction (i.e. higher bond yields) to increased default fears.
This leads to a very interesting case study that is Japan. With a debt to GDP ratio of over 200%, the Japanese 10-year bond yield is a relatively low 0.83%. Why? At the moment, the bond market feels that the Japanese have the ability to repay their debts — in part due to Japan's perceived ability to raise taxes. To that end, Japanese Prime Minister Yoshiko Noda just won opposition support for the doubling of the nation's sales tax to 10% by 2015.
So it's not just the amount of debt but also convincing your banker that you are good for it.
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Comments

11 responses to “Debt Levels Relative to GDP of PIIGS and Some Other Major Countries”

  1. Johnny Castillo Avatar
    Johnny Castillo

    It’s funny that we have a smaller population, but a bigger GDP than CHINA! it’s nonsense! Inflation will eventually catch up, and bite us all in the ASS!
    http://www.johnnycastillo.com

    Reply
  2. quickcash Avatar
    quickcash

    Debt is really becoming a global problem. This is true that the PIIGS are now enduring relatively very high debt problems. This high debt can be very harmful for PIIGS, as PIIGS is a higher tax payer as well.

    Reply
  3. cash loans australia Avatar
    cash loans australia

    I really would like to say thanks to you for this char and data with us. This chart is really very helpful to understand the debt levels relative to the GDP of PIIGS and also with some more countries. This chart shows all the shows the debt level by countries.

    Reply
  4. QuickLoan Avatar
    QuickLoan

    The load of debt is being increasing day-by-day and is now the major issues amongst the all. Every country is facing the problem of debt that hindering the international markets. The investors are pulling back their hands from investing as there doesn’t seem to be any progress.

    Reply
  5. my pay day Avatar
    my pay day

    Well all the main countries are on the PIIGS chart having high debt relative to GDP. Japan is the only one Asian country to be outstanding in debt rest is still doing quite well. Still no one knows what the debt is going to cause if it still going to move on the same way.

    Reply
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