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Долговая глобализация

The national debt of the world’s countries is continuing to grow, and, according to the latest estimates, countries are having an increasingly difficult time stabilizing that debt, let alone decreasing it. A recent report by the World Organization of Creditors states that preliminary results for 2012 show the total indebtedness of all countries has exceeded $55 trillion

The largest portion (75%) is accounted for by only seven developed economies, the G7 countries. During the previous year, they not only failed to improve their situations but increased their debt by 5%. The total indebtedness of developed countries has grown by 12%, or 110% of total GDP.

The situation is not as critical in developing countries: during 2012, the total public debt grew by 1%, or 34% of GDP. The greatest increase was in the countries of the Middle East and Northern Africa, where public debt increased by 5%. In other regions the increase was 1-2% of the previous year’s level.

Table 1. Public debt of key regions

RegionPublic debt, in billion US dollars (US), 2012Public debt, in billion US dollars (US), 2011ChangeDebt-to-GDP ratio, 2012
Developed countries465394171512%110%
G742261403985%129%
European Union1431614458-1%89%
Developing countries932992341%34%
Asia411440172%32%
Latin America and the Caribbean Islands281228170%49%
The Middle East and Northern Africa7987575%27%
Commonwealth of Independent States3623571%14%

Sources: World Organization of Creditors, IMF, CIA

No substantial changes have occurred in the leaders with respect to public debt. The first two places in the rating are held by the USA and Japan, with $16 and $14 trillion, respectively. Thus, more than half of the world’s sovereign debt is accounted for by two countries. They are followed by countries whose public debt stands at $1-3 trillion. After Japan, where government liabilities are almost three times domestic GDP, the most difficult situation exists in Italy. At the end of 2012, Italy’s sovereign debt-to-GDP ratio was 126%. However, some experts note that the situation there is more stable than that of its Southern European neighbors, since government bonds have long maturities and are owned mostly by domestic investors.

The largest percentage-based increase of public debt among the countries studied was in Kazakhstan, where the debt increased by more than a third (+32%), moving that country to 58th place in terms of volume of public debt. The greatest increase in financial liabilities among developed countries occurred in Spain and Australia, with indebtedness growing by 23% and 19%, respectively, in 2012.

China is continuing to reduce its public debt. At the end of 2012, its indebtedness had decreased by 6% over the previous year, while the government had paid off another 5% of its liabilities. The public debt of Greece also decreased by 8%; this can be explained by the fact that creditors wrote down that nation’s debt in 2012. Hungary’s financial liabilities decreased by 15%, placing it at 42 in the overall rankings.

Table 2. Country rankings by size of public debt

Place in 2012 rankingPlace in 2011 rankingCountryPublic debt, in billion US dollars (US), 2012Public debt, in billion US dollars (US), 2011ChangeDebt-to-GDP ratio 2012
11USA16730,515536,38%107%
22Japan14148,913476,95%237%
33Germany2888,72881,50,30%83%
44Italy2611,22640,7-1%126%
55France24402387,92%90%
66Great Britain2175,11977,410%89%
77China1770,91886,1-6%22%
89Canada1579,31483,86%88%
98Brazil1569,71619-3%64%
1011Spain1267,71032,323%91%
1110India1202,611237%68%
1212Netherlands547547,6-0,10%68%
1313Mexico520,3506,33%43%
1414Belgium492502,1-2%99%
1515Greece462,9501,3-8%171%
      
2625Russia222,9221,31%11%

Source: World Organization of Creditors, IMF, CIA

Japan is still at the top of the list in public debt per capita: more than $110,000 per resident. Japan is followed by Ireland ($53,900 per resident), with Singapore and the United States very close behind.  In these countries, the debt per capita is $53,000. At the same time, the pressure on residents of Qatar has considerably increased: each resident accounts for more than $37,000, a 19% increase over last year.

In Russia as a whole, the public debt is stable. At the end of 2012, it had increased by 1% year-on-year, and has not exceeded 11% of GDP. The indebtedness per capita is a little more than $1,500.

Table 3. Country rankings by public debt per capita

PlaceCountryPublic debt per  resident, US dollars, 2012Public debt per  resident, US dollars, 2011Change
1Japan110875,1105373,85,20%
2Ireland53992,850585,16,70%
3Singapore53435,952994,60,80%
4USA5322949804,46,90%
5Norway49438,748246,32,50%
6Canada45347,643086,65,20%
7Belgium44549,845854-2,80%
8Italy42879,643557,5-1,60%
9Greece41313,144783,4-7,70%
10France38474,8378271,70%
11Qatar37506,531793,918%
12Switzerland36240,837446,2-3,20%
13Austria36035,635992,40,10%
14Germany35323,335234,90,30%
15Great Britain34490,531565,39,30%
    
47Russia1570,81554,11,10%
51China1308,11399,8-6,60%

Sources: World Organization of Creditors, IMF, CIA

When it comes to international reserves, China boasts the most impressive “safety cushion”. During the last year, the country increased its currency reserves to $3.5 trillion, which is three times the public debt. Second place is held by Japan, with $1.3 trillion, although that is enough to cover only 10% of the public debt. Third place is firmly held by Saudi Arabia, which continues to increase its reserves. Russia, which ranks fourth, could soon be “pushed out” by the USA, which is continuing to increase its reserve funds. Nevertheless, it should be noted that in case of an emergency, most countries won’t have enough in their “piggy banks” to cover all their debts.

Table 4. Country rankings by size of international reserves, 2012

PlaceCountrySize of international reserves, in billion US dollars (US)Reserve coverage of public debt
1China3549200%
2Japan 135110%
3Saudi Arabia626,81749%
4Russia561,1252%
5USA537,2673%
6Taiwan391195%
7Brazil371,124%
8Switzerland330,585114%
9Republic of Korea319,282%
10Hong Kong299,6348%
11India287,224%
12Singapore253,388%
13Germany234,1048%
14Algeria190,51078%
15Italy173,37%

Sources: World Organization of Creditors, IMF, CIA

However, based on the predicted growth of public debt compared to GDP, some reduction of this figure is expected in the second half of this decade. But optimists within the IMF are still betting on increased GDP instead of a real reduction in public indebtedness.

 

Author: Irina A. Levina, July 09, 2013