Seeking Alpha
June 21 2009

U.S. Tops List of Countries with the Largest External Debt

The World Bank maintains the database of Gross External Debt Positions
of countries.The top five countries with the largest external debt are
as follows:

Country External Debt in Millions Year-Over-Year Change
(at the end of 2008)
United States 13,641,807 1.6%
United Kingdom 9,388,012 -19.9%
Germany 5,250,499 1.8%
France 5,001,696 2.4%
Netherlands 2,439,864 -6.1%

The USA is the biggest debtor country with a total of $13.6 Trillion
at the end of 2008. On a year-over-year basis, this represents an
increase of 1.6%. In order to see the creditors to the US, you can
check my earlier post titled Top Ten Creditors to the USA. The country
with the second largest debt is the UK. Total external debt of the UK
stood at $9.3 T. Though this may seem large at first glance, it is
actually good since the UK reduced their debt by 19.9% from 2007. All
the top five debtor countries are developed rich countries.This is
fascinating since these countries are able to borrow so much money to
keep their economy moving forward.

The countries with the lowest amount of debt are:

Country External Debt in Millions Year-Over-Year Change
(at the end of 2008)
Armenia 3427 15.1%
Kyrgyz Republic 3467 8.8%
Paraguay 3507 11.7%
Moldova 4125 19.4%
Bolivia 5923 9.1%

All the above countries are small countries in the developing
world. Armenia has the lowest debt at $3.4B. However this was an
increase of 15.1% from 2007.

Some of the countries have been reducing their external
debt. Switzerland and the UK reduced it the most at nearly 20% from
2007. Other countries that have decreased their debt in 2008 include
Australia, Canada, Israel, Egypt, etc.

The list below shows the countries that reduced their debt in 2008:

Country Year-over-Year Change
Korea -0.7%
Egypt -2.2%
Uruguay -3.0%
South Africa -4.8%
Israel -5.1%
Italy -6.0%
Netherlands -6.1%
Canada -7.4%
Australia -7.4%
Hong Kong, China -7.7%
Belgium -14.3%
United Kingdom -19.9%
Switzerland -19.9%

The countries that increased their external debt in 2008 compared to
2007 are:

Country Year-over-Year Change
Georgia 26.8%
Japan 24.6%
Ukraine 20.4%
Hungary 20.0%
Moldova 19.4%
Malaysia 17.2%
Bulgaria 16.6%
Belarus 15.7%
Slovak Republic 15.6%
Armenia 15.1%
Chile 14.0%
Paraguay 11.7%
India 10.8%
Croatia 10.1%
Kazakhstan 10.1%
Turkey 10.1%

Georgia was the worst with an increase of over 25%. Hungary almost
collapsed due to the heavy debt load before it was rescued earlier
this year.

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