Global conditions post-2020
Following the dire conditions of 2020 and the subsequent impact on the economies of many countries across the globe, it is no wonder that many are now facing record-level debt while trying to stay afloat. Much like any business, countries also have to fund their operations and needs, which is why if the economy is not doing well or showing any signs of growth or improvement, they will most likely have to turn to debt funding. Moreover, views and opinions on public debt have also changed after 2020, as people that were previously against it may now see merit in using debt funding for good. Therefore, it can be said that the global conditions of 2020 have reshaped the way people think of finances as a whole, including forex trading. While there was previously much scepticism and hesitance on the phenomenon, many more people have been exploring the financial markets since 2020. According to reports, there has been a new wave of interest in alternative ways of investing and making an income, which is why trading currencies on forex markets, such as USD, GBP, and EUR, amongst many other safe-haven currencies, has gained new traction.
Countries facing record-level debt
Industry experts have admitted that 2020 led to a widening of the gap between the poor and the rich nations. This means that years of progress were undone by the unprecedented global conditions of last year. According to World Bank figures, the debt burden of more than 70 low-income nations is said to have increased by an astounding 12%, reaching a whopping $860 billion in 2020. The main reason for the growing concern is that debt levels had been rising for years before 2020, and last year merely exacerbated an already dire situation. Therefore, the concern now is that many countries have emerged from 2020 with a large debt that will take years, possibly decades to manage and stabilize. On the upside, it seems that not all countries were as affected, as the likes of Mexico, Argentina, Denmark, Ireland, and Lebanon emerged with a debt-to-GDP ratio that is below their pre-2020 level.
While many other countries are feeling the impact of 2020, below are the top 10 countries with the highest national debt, in no particular order, according to reports.
- Japan at approximately $9.087 trillion
- Greece at approximately $379 billion
- Portugal at approximately $264 billion
- Italy at approximately $2.48 trillion
- Bhutan at approximately $2.33 billion
- Cyprus at approximately $21.64 billion
- Belgium at approximately $456.18 billion
- The United States at approximately $19.23 trillion
- Spain at approximately $1.24 trillion
- Singapore at approximately $254 billion
It is also important to note that the debt-to-GDP ratio is impacted by the country’s population, which explains why Japan has the highest national debt. With a population of approximately 127,185,332, its national debt is said to be 234.18% of its GDP. Following the stock market crash in Japan, the government provided financial relief for banks and insurance companies by providing them with low-interest credit. This ultimately led to the country’s debt level skyrocketing.