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Sunday, October 9, 2011

Biggest Nations of the World in Debt Trap !!!

Lots of among us from the financial markets talk about Double dip recession in United States &  Europe going burst so what’s the condition of US economy in compare with the European nations & the rest of countries.  But first some points – Deficit spending, government Debt and private sector borrowing are the unstated rule in most of the western countries, but due to financial crisis some of these nations are in worst debt condition than others. Throughout the financial crisis, many national economies have looked to their government & foreign lenders for financial support, which translates to increase in spending, borrowing & in most cases, growing national debts.
External debt is a measure of nation’s foreign liabilities, capital plus interest that the government must eventually pay.  A useful measure of a country’s debt position is by comparing gross external debt to GDP. By comparing a country’s debt to what it produces, this ratio can be used to help determine the likelihood that country as a whole will be able to repay its debts.
The debt situations of many of these countries have become so influential that countries like India also get affected. India’s April – June quarter GDP slipped to 18 month low to 7.7 %, the second consecutive quarter of sub 8 % growth. But India is somewhat in better place than its Asian peers. Positives for India includes the country’s low exports to GDP ratio, domestically financed fiscal deficit, limited exposure to foreign liabilities and a healthy banking system. 

Country External Debt (% of GDP) Gross External Debt2010 GDP (Est)External Debt/ Capita
Ireland 1,382 %$ 2.38 trillion$ 172.3 billion $ 5,66,756
UK 413.3 %$ 8.981 trillion$ 2.173 trillion $ 1,46,953
Switzerland 401.9 %$ 1.304 trillion$ 324.5 billion $ 1,71,528
Netherlands 376.3 %$ 2.55 trillion$ 676.9 billion $ 1,52,380
Belgium 335.9 %$ 1.324 trillion$ 394.3 billion $ 1,27,197
Denmark 310.4 %$ 626.1 billion$ 201.7 billion $ 1,13,826
Sweden 282.2 %$ 1.001 trillion$ 354.7 billion $ 1,10,479
Finland 271.5 %$ 505.06 billion$ 186 billion $ 96,197
Austria 261.1 %$ 867.14 billion$ 332 billion $ 1,05,616
Norway 251 %$ 640.7 billion$ 255.3 billion $ 1,37,476
Hong Kong 250.4 %$ 815.65 billion$ 325.8 billion $ 1,15,612
France 250 %$ 5.37 trillion$ 2.15 trillion $ 83,781
Portugal 223.6 %$ 552.23 billion$ 247 billion $ 51,572
Germany 185.1 %$ 5.44 trillion$ 2.94 trillion $ 51,572
Greece 182.2 %$ 579.7 billion$ 318.1 billion $ 53,984
Spain 179.4 %$ 2.46 trillion$ 1.37 trillion $ 60,614
Italy 146.6 %$ 2.602 trillion$ 1.77 trillion $ 44,760
Australia 138.9 %$ 1.23 trillion$ 882,4 billion $ 57,641
Hungary 120.1 %$ 225.24 billion$ 187.6 billion $ 22,739
United States 101.1 %$ 14.825 trillion$ 14.66 trillion $ 48,258


I would say that if US goes into recession and Europe defaults - yes in that case, we will be affected, but we will be still running with 7.00 % of GDP growth rate, whereas these countries would be on oxygen tanks with their GDP in minuses……..So money will flow looking for growth & better returns from these countries to Emerging countries like INDIA, CHINA,BRAZIL,RUSSIA. HAPPY INVESTING !!

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