Despite Donald Trump building up the success of the U.S. economy, the current financial standing of the nation is built on a high level of debt, a new survey finds. The U.S. ranks first as the most debt-dependent country in the world, with government debt at 122.5% of GDP and private credit nearly double the size of the economy. Capitalism may be the triumphant economic system in the wake of the failures of alternatives like state planning, but the economic system contains fissures built around patterns of unsustainable debt.
Countries around the world now owe a combined 307 trillion, with the US national debt alone recently passing 37 trillion. A new study by the company Taurex has analysed major economies to identify which countries rely most heavily on borrowed money. For those who believe in free-markets the findings make for sorry reading,
The study created a Financial Dependency Index using five economic measures: public sector obligations relative to output, private sector financing levels, per-capita income, national savings patterns, and employment metrics. Nations received scores on a standardized scale, with higher values indicating greater reliance on external capital.
The U.S. achieves the unenviable top ranking, with government obligations at 122.5% of GDP and private sector credit reaching 198% of economic output. The nation has the world’s highest GDP at 27.7 trillion and a strong per capita income of nearly 90K, but its 18% savings rate is fairly low, leaving little extra money set aside compared to the heavy borrowing.
Japan takes second place in financial dependency. The country reports the highest government debt level among developed economies at 234.9% of GDP, coupled with private credit approaching two times the size of the economy. While Japan’s 30% savings rate helps against these obligations, its lower 35K per capita income creates less capacity to cope with potential financial shocks.
Singapore is the third most debt-dependent country in the world. Despite 93K per capita income and a 40% savings rate, Singapore’s public liabilities sits at 174.9% of GDP, while private sector credit reaches 129.2% of the entire economy.
Sudan holds fourth place, showing high government borrowing despite low private credit access. The country posts the largest public borrowing among all ranked countries at 252% of GDP, while private credit remains at just 5.6% of economic output. With an under 600 per capita income and 5% savings rate, Sudan combines high sovereign debt with limited household earnings.
Canada is ranked fifth in global debt dependency. Government debt here stands at 112.5% of GDP, while private credit reaches 124.1% of economic output. At 55K per person, incomes are strong enough to support the obligation level, but savings are relatively low at 21%. Canada’s 7% unemployment rate also slightly reduces economic resilience.
China comes in sixthposition. While the country’s public liabilities appear moderate at 96.3% of GDP, private sector credit here takes up 194.2% of the economy, signaling heavy corporate and household reliance on borrowing money. At the same time, China’s per capita income of 13K indicates limited household capacity to handle liabilities.
Switzerland takes seventh place with elevated private sector credit. The Swiss government debt stands at 36.9% of GDP, although its private sector credit is at a higher end, amounting to 170.4% of the country’s economy.
The UK, under Kier Starmer, holds eighth position in debt reliance. Public borrowing in the UK stands at 103.9% of GDP, while private sector credit is slightly higher at 114%. A comparatively high per capita income makes it easier for UK residents to deal with debts, though the country’s low 15% savings rate leaves households with less protection in tough times.
France ranks ninth in debt dependency rankings. The country holds government obligations at 116.3% of GDP, and private credit equals 107.5% of economic output. Alongside its debt profile, France also shows a higher unemployment rate of 7%, contributing to its overall debt vulnerability.
South Korea completes the top ten of the most debt-dependent countries. While government borrowing remains lower here at 54.5% of GDP, South Korea’s private sector credit reaches 176.1% of the economy, one of the highest rates in the study. With a per capita income of 37K, such high borrowing could put pressure on households to manage their obligations.
As the data suggests, many countries now use borrowing as a permanent economic tool rather than a temporary solution. This works differently for rich versus poor countries. Wealthy states can borrow cheaply and in massive amounts while developing nations face high interest rates for much smaller loans. This gap will likely grow wider, making the debt burden even more uneven across countries.
