Debt-to-GDP ratio, an economic metric comparing a country’s government debt to its GDP, is important for evaluating economic stability and repayment ability. If we know the Debt-to-GDP ratio and the GDP, we can calculate the debt. So, if a country’s Debt-to-GDP ratio is 264% and its GDP is 100 units, then its debt would be 264 units (units can be USD, in billions and trillions). I collected data on debt-to-GDP ratios from worldpopulationreview.com for 166 countries. In this post, I share data and visuals created in Excel on the top 10 of most indebted and 10 least indebted countries.
NOTE: The list excludes countries without available data, as a result, the rank or order may be different. For example, if all tracked countries were included, USA would rank 12th in the Debt:GDP ratio list. All data from December 2022.
OBSERVATION:
DR congo has a Debt to GDP ratio of 14.6, while USA has it at 129…does this mean DR Congo has stronger economy than USA?
Not at all. The Debt-to-GDP ratio is just one of many indicators used to assess the health of an economy. While a lower Debt-to-GDP ratio, like DR Congo’s 14.6, might suggest less reliance on borrowing relative to the size of the economy, it doesn’t necessarily mean that DR Congo has a stronger economy than the USA.
The USA, despite its higher Debt-to-GDP ratio of 129, has a much larger and more diversified economy. It’s the world’s largest economy by nominal GDP and the second largest by purchasing power parity (PPP). The US economy is highly developed and advanced, with a high per capita GDP.
On the other hand, DR Congo, despite being rich in natural resources, has faced economic challenges including instability, underinvestment, and governance issues. Its GDP is significantly smaller, and it has a lower GDP per capita. The economy of DR Congo has been growing, but it still faces significant challenges.
So, while the Debt-to-GDP ratio is an important indicator, it’s crucial to look at the broader economic context. The strength of an economy is typically assessed using a variety of indicators, including GDP, GDP per capita, economic growth rate, inflation rate, unemployment rate, credti rating, political stability, history, and others. It’s also important to consider factors like economic diversity, stablity and the standard of living. In these respects, the USA’s economy is generally considered much stronger than DR Congo’s.
Thanks for reading!
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