Twenty-seven countries across the world are in debt crisis, with a further 80 at risk of being so, according to new figures released for World Debt Day on 16 May.
The figures, calculated by the Jubilee Debt Campaign, classify countries as in debt crisis if they have a large financial imbalance with the rest of the world and large government payments on external debt, as a proportion of revenue.
According to this analysis, 27 countries are currently in debt crisis, up from 22 when the figures were last calculated in 2015. The 27 countries include:
- Impoverished countries which have been hit by the fall in global commodity prices, including Ghana, Lao PDR, Mongolia and Mozambique;
- Eurozone countries such as Greece, Ireland and Portugal; and
- Countries in the global South which have been in debt crisis for many years, having never qualified for previous debt relief schemes, including Jamaica, Pakistan, Sri Lanka and Tunisia.
Tim Jones, economist at the Jubilee Debt Campaign, said:
“Too many countries labour under the servicing of unsustainable debts, at a cost to public services and meeting basic human needs. Rather than resolving these crises, institutions like the IMF perpetuate them by lending more money to countries in crisis, bailing out reckless lenders, whilst people suffer. This has to end, and lenders need to be required to reduce the debt.”
Jubilee Debt Campaign has also analysed the degree to which other countries are at risk of either a public or private sector debt crisis, based on them having a significant financial imbalance with the rest of the world, and either a significant government debt or debt payments, or significant private sector debt, compared to the country or government’s capacity to repay.
Under these measures, 22 countries are at risk of a public or private debt crisis, a further 18 at risk of a public debt crisis, and 40 a private debt crisis. In total this is 80 countries, up from 71 when the figures were last calculated in 2015. The 2015 evaluation concluded that Bhutan, Ghana, Lao PDR, Mongolia and Mozambique were countries at high risk of debt crisis, which have now moved into the ‘in debt crisis’ category.
In 2015 Jubilee Debt Campaign spotted the high risk in Mozambique which was missed by the IMF, who evaluated the country as at moderate risk in 2015.
Countries at risk of a private sector debt crisis include Australia, the UK and US, and those at risk of a public sector debt crisis include Cameroon, Ethiopia and Zambia.
Tim Jones, economist at the Jubilee Debt Campaign, said:
“The world is woefully underprepared for a new round of debt crises, both because of the failure to create a fair and transparent debt restructuring process for government debts, and the lack of action to strengthen regulation of bank lending and controls on cross-border movements of money. As US dollar interest rates increase, the threat of crises will escalate.”
Notes on the calculations
The countries evaluated as in debt crisis or at risk of being so are:
| In debt crisis | At risk of public debt crisis | At risk of private debt crisis | At risk of public or private debt crisis |
| Belize | Cameroon | Albania | Angola |
| Bhutan | Congo, Dem Rep. | Australia | Armenia |
| Chad | Congo, Rep. | Belarus | Cape Verde |
| Cyprus | Djibouti | Bosnia | El Salvador |
| Dominican Rep. | Dominica | Brazil | Georgia |
| Gambia | Ethiopia | Bulgaria | Honduras |
| Ghana | Guyana | Burkina Faso | Hungary |
| Greece | Kenya | Burundi | Indonesia |
| Grenada | Lesotho | Cambodia | Kyrgyz Rep. |
| Ireland | Maldives | Central African Rep. | Macedonia |
| Jamaica | Mauritania | Colombia | Morocco |
| Jordan | Madagascar | Costa Rica | Niger |
| Lao PDR | Marshall Islands | Croatia | Rwanda |
| Lebanon | Samoa | Egypt | Senegal |
| Lithuania | São Tomé and Príncipe | Estonia | Serbia |
| Malawi | St Vincent | Fiji | Sierra Leone |
| Marshall Islands | South Sudan | Kazakhstan | Tajikistan |
| Mongolia | Zambia | Kosovo | Tanzania |
| Montenegro | Latvia | Togo | |
| Mozambique | Mali | Tonga | |
| Pakistan | Mauritius | Ukraine | |
| Portugal | Mexico | Vanuatu | |
| Slovenia | Moldova | ||
| Spain | New Zealand | ||
| Sri Lanka | Nicaragua | ||
| Tunisia | Palau | ||
| Venezuela | Panama | ||
| Papua New Guinea | |||
| Paraguay | |||
| Peru | |||
| Poland | |||
| Romania | |||
| Seychelles | |||
| Slovak Rep. | |||
| South Africa | |||
| Suriname | |||
| Turkey | |||
| Uganda | |||
| UK | |||
| United States |
For the 2015 calculations see ‘The new debt trap: How the response to the last global financial crisis has laid the ground for the next’
Countries are assessed as being in debt crisis if they have a large financial imbalance with the rest of the world and large government external debt payments.
A large financial imbalance with the rest of the world is defined as a net international investment position of -30% of GDP or worse, or a current account deficit averaging over 3% a year for three years. The net international investment position is the difference between a country’s (public and private sector’s) external assets and liabilities.
Large government payments on external debt are defined as when government external debt payments are greater than 15% of government revenue.
Countries are assessed as at risk of private sector debt crisis if they have:
a) A net international investment position of -30% of GDP or worse OR a current account deficit of more than 3% of GDP, averaged over the last three years
AND
b) Private external debt of over 40% of GDP OR 150% of exports
Countries are assessed as at risk of a public debt crisis if they have:
a) A net international investment position of -30% of GDP or worse OR a current account deficit of more than 3% of GDP, averaged over the last three years
AND
b) External government debt payments projected by the IMF to exceed 15% of government revenue (over several years) with one economic shock OR government external debt over 40% of GDP or 150% of exports OR government external debt payments over 10% of revenue.
A list of the figures for all countries is available here.
Figures on the net international investment position come from the IMF database,
or if not available are calculated using external debt and reserves figures from the World Bank World Development Indicators database.
Current account, government revenue and GDP data is from the IMF World Economic Outlook database.
Government external debt data is from the World Bank external debt database or where not available the World Bank World Development Indicators database.
Government external debt payments are from the World Bank World Development Indicators database or the IMF Debt Sustainability Analysis for the country concerned, available here . These do not cover some rich countries, so data has been calculated individually for each rich country based on IMF data on external debt and interest payments.
Exports data is from the World Bank World Development Indicators database.
Whether external government debt payments are projected by the IMF to exceed 15% of government revenue (over several years) with one economic shock comes from the IMF Debt Sustainability Analysis for the country concerned, available here.