10 Countries with the Most Public Debt in the World

TEMPO.CO, Jakarta - Public debt is the amount of obligations that must be paid at a certain time by the government of a country to lenders.

Quoting the Journal of Treasury, State Finance and Public Policy (ITRev) of the Ministry of Finance (Kemenkeu), public debt can be grouped into three types, namely short-term, medium-term and long-term debt.

There are several perspectives related to public debt theory. Keynesian economists view public debt as not causing an economic burden and can overcome unemployment. Neoclassical economists argue that public debt has no negative or positive impact, aka neutral. Meanwhile, the general public calls public debt a deferred tax that could harm future generations.

So, which countries have the largest public debt in the world? Is Indonesia also in the top 10?

List of Countries with the Most Public Debt in the World

The UN Global Crisis Response Group (GCRG) released a report entitled "A World of Debt" in the July 2023 edition. The amount of public debt globally has reached US$ 92 trillion in 2022.

The Covid-19 pandemic and climate change are thought to be the causes of the increase in public debt globally over the last decade. As a result, 59 countries will experience an extreme spike in public debt in 2022, compared to 22 countries in 2011.

Of the total public debt, 70 percent is owned by developed countries. Meanwhile, the remainder or 30 percent comes from developing countries with higher debt interest rates. The four developing countries that recorded the highest public debt, namely China, India, Brazil and Mexico.

The following is a list of the 10 countries with the largest public debt in the world as of 2022:

1. United States

GCRG reported that the total public debt of the United States (US) reached US$ 30,985 billion. According to the US Department of the Treasury, the federal government's largest expenditures are for income security, such as unemployment compensation, retirement benefits, and benefits for disabled employees.

2. China

China's public debt in 2022 will reach US$13,955 billion. According to the International Monetary Fund (IMF), China over the past quarter century has proactively used fiscal policy to address the domestic economy. It is not surprising that public debt continues to increase.

3. Japan

According to the Institute of Analytics and Advocacy (IAA), public debt management policy in Japan is aimed at government bonds. The main aim is to ensure the stability of national financing and reduce costs. Japan's total public debt is US$ 11,061 billion.

4. England

With a total public debt of US$ 3,152 billion, the Jubilee Debt Coalition said the UK used the funds to buy other government bonds on the secondary debt market. In addition, public debt is used to maintain the overall total debt of the UK Government.

5. France

France is the country with the most public debt in the world in 5th position. The total public debt of the country with the iconic Eiffel Tower reached US$ 3,092 billion. These funds are used by President Emmanuel Macron's government to support the post-Covid-19 economy.

6. Italy

Italy recorded a total public debt of US$ 2,911 billion. Quoting Reuters, Italian Economy Minister Giancarlo Giorgetti wants domestic investors to contain the increasing amount of government debt by increasing the issuance of new bonds.

7. India

India's total public debt will be US$ 2,815 billion in 2022. According to the Reserve Bank of India (RBI), public debt in the country from 1991 until now has been used to finance development, social engineering such as abolishing the Zamindari system (hereditary land ownership), and saving environment.

8. Germany

The amount of German public debt has reached a record of US$ 2,711 billion at the end of 2022. Based on data from the German Federal Statistical Office (Destatis), this amount has increased by 2 percent compared to the end of 2021. The majority of this debt is used for funding after the Covid-19 pandemic. and dealing with the energy crisis.

9. Spain

Spain recorded a total public debt of US$1,568 billion in 2022. Reporting from Reuters, Spanish Minister of Economy, Nadia Calvino, said that the size of the government debt could not be separated from the international context, namely the Russia-Ukraine war.

10. Australia

In 10th place, Australia is included in the list of countries with the highest public debt in the world. According to the Australian Parliament, the trend of increasing government debt started from the Global Financial Crisis (GFC) until after the Covid-19 pandemic ended, with the amount reaching US$ 947 billion in 2022.

MELYNDA DWI PUSPITA

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