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

  1. Payday Bank Avatar
    Payday Bank

    Today the abbreviation as well as meaning of GDP in itself has changed, firstly it was known as Gross Domestic Product and now it’s simply changed its abbreviation to Gross Debt Product. And above that what’s fascinating about it, Gross Domestic Product is stagnant from years and Gross Debt Product enchanting increasing on day-by-day. Now if anyone talks about GDP it’s all what debt being discussed.

    Reply
  2. karol Avatar
    karol

    Today the whole scenario for debt has been changed and new patterns for managing finances are being applied. Now one has to go along the world making their future secure and debt free. Well I only know one thing to defeat debt and that is managing finance smartly and working accordingly with the planned budget.
    http://www.kwikpayday.co.uk

    Reply
  3. Payday Loans Avatar
    Payday Loans

    Surely debt is now one of the biggest issues and a bubble bursting topic which has to be taken care off as immediately as it can. All the major countries are really in a problematic condition with lots of debt and still increasing with the loads. Some crucial measures have to be taken to overcome debt or else it would be quite difficult to survive.

    Reply
  4. Quick Cash Avatar
    Quick Cash

    Everyone has a dream to be financially strong and have a peaceful life but if we look around we would find many countries and states are still quite backward because lack of capital. Majority of residence are moving out in search of job, education, living and much more. Well results are same everywhere just because of heavy debts, the governments are also not able to impose any laws or measure to the big destruction and falling off from GDP.

    Reply
  5. 12 month loans Avatar
    12 month loans

    Firstly we used to hear that population is one of the most problematic scenario, but as days have gone everything has been changed. Today the most bubble bursting topic is Debt which have gone beyond the sky limits and in fact have left the population way back. Now population is nothing in front of huge debt and it’s the problem all over the world.

    Reply
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