Economy
Chart: Debt-to-GDP Continues to Rise Around the World

Chart: Debt-to-GDP Continues to Rise Around the World
With vaccines slowly obtaining approval in various countries, the world may finally be on the path to overcoming the COVID-19 pandemic.
The economic situation, on the other hand, is unlikely to improve anytime soon. Falling revenues combined with costly pandemic relief measures have increased global debt by $20 trillion since the third quarter of 2019. By the end of 2020, economists expect global debt to reach $277 trillion, or 365% of world GDP.
Today’s chart uses data from the Institute of International Finance (IIF) to provide an overview of where debt, relative to GDP, has increased the most.
Comparing Developed and Emerging Markets
Developed economies represent four of the five countries seeing the largest increases in debt-to-GDP, but looking from a more macro angle reveals that debt levels are rising at a similar pace around the world.
Q3 2019 ($ trillions) | Q3 2020 ($ trillions) | % Increase | |
---|---|---|---|
Developed markets | $181.8 | $196.3 | 8.0% |
Emerging markets | $70.9 | $76.4 | 7.7% |
Global total | $252.7 | $272.7 | 7.9% |
Source: IIF, BIS, IMF, Haver, National Sources
To put these figures into perspective, economists often use the debt-to-GDP metric, which compares a country’s debt to its economic output. As the name implies, it’s calculated by taking a country’s total debts and dividing them by its annual GDP. Having a low debt-to-GDP ratio suggests that a country will have little issues paying off its debts, while a high ratio can be interpreted as a sign of higher default risk.
The actual definition of a “low” or “high” ratio is quite loose, though the World Bank believes there is a threshold for government debt at 77% of GDP. Every percentage point beyond this threshold has been found to detract 0.017 percentage points from annual growth.
Comparing Debt-to-GDP by Sector
To see how COVID-19 has affected the global economy since Q3 2019, let’s take a look at each sector’s debt as a percentage of GDP.
Households (Q3 '19) | Households (Q3 '20) | Non-financials* (Q3 '19) | Non-financials* (Q3 '20) | Government (Q3 '19) | Government (Q3 '20) | |
---|---|---|---|---|---|---|
Developed markets average | 72% | 78% | 91% | 102% | 110% | 131% |
U.S. | 74% | 81% | 75% | 88% | 102% | 127% |
Euro Area | 58% | 61% | 108% | 114% | 102% | 115% |
UK | 84% | 88% | 73% | 78% | 110% | 130% |
Emerging markets average | 40% | 44% | 93% | 104% | 53% | 60% |
China | 54% | 60% | 150% | 166% | 53% | 63% |
Russia | 19% | 23% | 78% | 91% | 15% | 18% |
Global total | 60% | 65% | 92% | 103% | 89% | 105% |
*Corporations that are not in the financial industry.
Source: IIF, BIS, Haver, National Sources
Within developed markets, government debt-to-GDP grew by 21 percentage points compared to 11 for non-financial corporates, and 6 for households. This is unsurprising as governments have supplied billions (or in some cases, trillions) of economic stimulus while also pulling in less tax revenue.
The story in emerging markets is slightly different, with non-financial corporates experiencing the largest increase at 11 percentage points. The sector’s debt is now at 104% of GDP, making it the most highly-leveraged in the region.
Highlights from Today’s Chart
Today’s chart boils this data down to the individual country level, allowing us to identify two outliers: Canada and Australia.
Excluding the financial sector, Canada’s debt-to-GDP ratio increased by nearly 80%, the highest of any developed country. Government borrowing surged as the Canada Emergency Response Benefit (CERB), which provided struggling Canadians with roughly $1,500 a month, rang up a bill of $60 billion over 7 months.
An increase in debt wasn’t the only reason for the country’s worsening debt-to-GDP ratios. In Q2 2020, Canada’s GDP declined at an annualized rate of 38%, its worst three-month performance on record.
Australia was another outlier, but for a different reason; the country’s household debt decreased by almost 5% relative to GDP. This was likely due to an early-access scheme that allowed millions of Australians to make withdrawals from their superannuation, a social security fund similar to America’s 401(k).
We know that almost 60 per cent of those accessing their [superannuation] early have used it…to meet essential day-to-day expenses, including paying down debts.
—Josh Frydenberg, Treasurer of the Commonwealth of Australia
Officials have exercised caution around the prolonged use of these programs, as superannuation funds are meant to support people through retirement. Of the 2.6 million Australians that accessed their superannuations early, 500,000 are believed to have completely emptied their accounts.
Debt-to-GDP is Set to Fall…Or is it?
A global roll out of COVID-19 vaccines is likely to end the ongoing health crisis and allow the economy to return to pre-pandemic levels, though delays are to be expected.
Regardless, this spells good news for governments and financial institutions around the world—economic output will recover, shrinking debt-to-GDP ratios. Whether or not borrowing will also slow down, however, is much harder to predict.
Government borrowing has been relied on to stimulate growth since 2008, and with 75% of Americans in favor of a second COVID-19 relief bill, public debt is likely to accumulate further. Private sector debt is following a similar trend, with non-financial U.S. corporations owing $10.9 trillion as of Q2 2020, up from $6.4 trillion at the start of 2008.
These growing debts have been manageable thanks to an extended period of low interest rates and loose monetary policy, but whether or not this is sustainable remains to be seen.
Maps
Mapped: Renewable Energy and Battery Installations in the U.S. in 2023
This graphic describes new U.S. renewable energy installations by state along with nameplate capacity, planned to come online in 2023.

Renewable and Battery Installations in the U.S. in 2023
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Renewable energy, in particular solar power, is set to shine in 2023. This year, the U.S. plans to get over 80% of its new energy installations from sources like battery, solar, and wind.
The above map uses data from EIA to highlight planned U.S. renewable energy and battery storage installations by state for 2023.
Texas and California Leading in Renewable Energy
Nearly every state in the U.S. has plans to produce new clean energy in 2023, but it’s not a surprise to see the two most populous states in the lead of the pack.
Even though the majority of its power comes from natural gas, Texas currently leads the U.S. in planned renewable energy installations. The state also has plans to power nearly 900,000 homes using new wind energy.
California is second, which could be partially attributable to the passing of Title 24, an energy code that makes it compulsory for new buildings to have the equipment necessary to allow the easy installation of solar panels, battery storage, and EV charging.
New solar power in the U.S. isn’t just coming from places like Texas and California. In 2023, Ohio will add 1,917 MW of new nameplate solar capacity, with Nevada and Colorado not far behind.
Top 10 States | Battery (MW) | Solar (MW) | Wind (MW) | Total (MW) |
---|---|---|---|---|
Texas | 1,981 | 6,462 | 1,941 | 10,385 |
California | 4,555 | 4,293 | 123 | 8,970 |
Nevada | 678 | 1,596 | 0 | 2,274 |
Ohio | 12 | 1,917 | 5 | 1,934 |
Colorado | 230 | 1,187 | 200 | 1,617 |
New York | 58 | 509 | 559 | 1,125 |
Wisconsin | 4 | 939 | 92 | 1,034 |
Florida | 3 | 978 | 0 | 980 |
Kansas | 0 | 0 | 843 | 843 |
Illinois | 0 | 363 | 477 | 840 |
The state of New York is also looking to become one of the nation’s leading renewable energy providers. The New York State Energy Research & Development Authority (NYSERDA) is making real strides towards this objective with 11% of the nation’s new wind power projects expected to come online in 2023.
According to the data, New Hampshire is the only state in the U.S. that has no new utility-scale renewable energy installations planned for 2023. However, the state does have plans for a massive hydroelectric plant that should come online in 2024.
Decarbonizing Energy
Renewable energy is considered essential to reduce global warming and CO2 emissions.
In line with the efforts by each state to build new renewable installations, the Biden administration has set a goal of achieving a carbon pollution-free power sector by 2035 and a net zero emissions economy by no later than 2050.
The EIA forecasts the share of U.S. electricity generation from renewable sources rising from 22% in 2022 to 23% in 2023 and to 26% in 2024.
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