Recently, there had been growing concerns over sovereign debts after Dubai stunned the world by announcing a need for a temporary debt repayment freeze.
S&P said that Spain will experience a “more prolonged period of economic weakness” than anticipated at the start of 2009 and has cut its AA+ debt rating outlook from stable to negative.
Portugal’s outlook was also revised to “negative” from “stable” by S&P while Greece had its credit ratings was reduced one step to BBB+ by Fitch Ratings and S&P.
A measure of a nation’s foreign liabilities, capital plus interest that the government and institutions within a nation’s borders must eventually pay is their external debt. This number includes not only government debt, but also debt owed by corporations and individuals to entities outside their home country.
One way of comparison is by looking at the percentage of each nation’s external debt to its GDP. CNBC did a study two months ago and compiled a list using numbers provided from the World Bank.
Here is the list of the largest nation debtors out of the world’s largest 75 economies:
Country Name, Gross External Debt, GDP, percentage of external debt vs GDP
While US has the largest external debt, it is only ranked 20th while comparing it to GDP.
Iceland has a percentage of 999% while among the low ratios, Singapore, China and India have percentages of 10.7%, 4.7% and 4.6% respectively.