Countries with the lowest national debt 2022 | Statista (2024)

FAQs

What countries have the lowest national debt? ›

Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP.

Japan consistently ranks among the countries with the highest national debt. In 2022, the nation's debt was estimated at almost 10 trillion U.S. dollars , while it's GDP is just 4.2 trillion . The Japanese government is currently spending around half of its total tax revenue on servicing its massive debt.

There is only one “debt-free” country as per the IMF database. For many countries, the unusually low national debt could be due to failing to report actual figures to the IMF.

With a debt of $290.5 billion, Switzerland ranks as one of the top countries that owe the US money. Investors in Switzerland have also increased their holdings of US debt. The country's other main creditors include countries such as Germany and France.

In total, other territories hold about $7.4 trillion in U.S. debt. Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion.

External Debt

Japan's national debt is a whopping 236% of GDP, the highest percentage of all developed countries, according to Invezz's research, which is based on OECD data.

Since the U.S. dollar has a variable exchange rate, however, any sale by any nation holding huge U.S. debt or dollar reserves will trigger the adjustment of the trade balance at the international level. The offloaded U.S. reserves by China will either end up with another nation or will return back to the U.S.

Why is the US in so much debt? ›

One of the main culprits is consistently overspending. When the federal government spends more than its budget, it creates a deficit. In the fiscal year of 2023, it spent about $381 billion more than it collected in revenues. To pay that deficit, the government borrows money.

Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation).

On the other end of the spectrum, Brunei has the lowest debt to GDP ratio at 1.90%, followed by the Cayman Islands at 4.50%, Kuwait at 7.10%, and Afghanistan at 7.40%.

India takes the top spot. The world's most populous country owed $38.3bn to the WB at the end of 2022, down by almost $1.5bn from a year earlier. India's outstanding balance is almost double that of the next biggest debtor, Indonesia, with $20.6bn.

Around 70% of Japanese government bonds are purchased by the Bank of Japan, and much of the remainder is purchased by Japanese banks and trust funds, which largely insulates the prices and yields of such bonds from the effects of the global bond market and reduces their sensitivity to credit rating changes.