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Which Countries Hold the Most U.S. Debt?

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Chart showing which countries hold the most U.S. debt

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Which Countries Hold the Most U.S. Debt in 2022?

Today, America owes foreign investors of its national debt $7.3 trillion.

These are in the form of Treasury securities, some of the most liquid assets worldwide. Central banks use them for foreign exchange reserves and private investors flock to them during flights to safety thanks to their perceived low default risk.

Beyond these reasons, foreign investors may buy Treasuries as a store of value. They are often used as collateral during certain international trade transactions, or countries can use them to help manage exchange rate policy. For example, countries may buy Treasuries to protect their currencyโ€™s exchange rate from speculation.

In the above graphic, we show the foreign holders of the U.S. national debt using data from the U.S. Department of the Treasury.

Top Foreign Holders of U.S. Debt

With $1.1 trillion in Treasury holdings, Japan is the largest foreign holder of U.S. debt.

Japan surpassed China as the top holder in 2019 as China shed over $250 billion, or 30% of its holdings in four years.

This bond offloading by China is the one way the country can manage the yuan’s exchange rate. This is because if it sells dollars, it can buy the yuan when the currency falls. At the same time, China doesnโ€™t solely use the dollar to manage its currencyโ€”it now uses a basket of currencies.

Here are the countries that hold the most U.S. debt:

RankCountryU.S. Treasury HoldingsShare of Total
1๐Ÿ‡ฏ๐Ÿ‡ต Japan$1,076B14.7%
2๐Ÿ‡จ๐Ÿ‡ณ China$867B11.9%
3๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom$655B8.9%
4๐Ÿ‡ง๐Ÿ‡ช Belgium$354B4.8%
5๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg$329B4.5%
6๐Ÿ‡ฐ๐Ÿ‡พ Cayman Islands$284B3.9%
7๐Ÿ‡จ๐Ÿ‡ญ Switzerland$270B3.7%
8๐Ÿ‡ฎ๐Ÿ‡ช Ireland$255B3.5%
9๐Ÿ‡น๐Ÿ‡ผ Taiwan$226B3.1%
10๐Ÿ‡ฎ๐Ÿ‡ณ India$224B3.1%
11๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong$221B3.0%
12๐Ÿ‡ง๐Ÿ‡ท Brazil$217B3.0%
13๐Ÿ‡จ๐Ÿ‡ฆ Canada$215B2.9%
14๐Ÿ‡ซ๐Ÿ‡ท France$189B2.6%
15๐Ÿ‡ธ๐Ÿ‡ฌ Singapore$179B2.4%
16๐Ÿ‡ธ๐Ÿ‡ฆ Saudi Arabia$120B1.6%
17๐Ÿ‡ฐ๐Ÿ‡ท South Korea$103B1.4%
18๐Ÿ‡ฉ๐Ÿ‡ช Germany$101B1.4%
19๐Ÿ‡ณ๐Ÿ‡ด Norway$92B1.3%
20๐Ÿ‡ง๐Ÿ‡ฒ Bermuda$82B1.1%
21๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$67B0.9%
22๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico$59B0.8%
23๐Ÿ‡ฆ๐Ÿ‡ช UAE$59B0.8%
24๐Ÿ‡ฆ๐Ÿ‡บ Australia$57B0.8%
25๐Ÿ‡ฐ๐Ÿ‡ผ Kuwait$49B0.7%
26๐Ÿ‡ต๐Ÿ‡ญ Philippines$48B0.7%
27๐Ÿ‡ฎ๐Ÿ‡ฑ Israel$48B0.7%
28๐Ÿ‡ง๐Ÿ‡ธ Bahamas$46B0.6%
29๐Ÿ‡น๐Ÿ‡ญ Thailand$46B0.6%
30๐Ÿ‡ธ๐Ÿ‡ช Sweden$42B0.6%
31๐Ÿ‡ฎ๐Ÿ‡ถ Iraq$41B0.6%
32๐Ÿ‡จ๐Ÿ‡ด Colombia$40B0.5%
33๐Ÿ‡ฎ๐Ÿ‡น Italy$39B0.5%
34๐Ÿ‡ต๐Ÿ‡ฑ Poland$38B0.5%
35๐Ÿ‡ช๐Ÿ‡ธ Spain$37B0.5%
36๐Ÿ‡ป๐Ÿ‡ณ Vietnam$37B0.5%
37๐Ÿ‡จ๐Ÿ‡ฑ Chile$34B0.5%
38๐Ÿ‡ต๐Ÿ‡ช Peru$32B0.4%
All Other$439B6.0%

As the above table shows, the United Kingdom is the third highest holder, at over $655 billion in Treasuries. Across Europe, 13 countries are notable holders of these securities, the highest in any region, followed by Asia-Pacific at 11 different holders.

A handful of small nations own a surprising amount of U.S. debt. With a population of 70,000, the Cayman Islands own a towering amount of Treasury bonds to the tune of $284 billion. There are more hedge funds domiciled in the Cayman Islands per capita than any other nation worldwide.

In fact, the four smallest nations in the visualization aboveโ€”Cayman Islands, Bermuda, Bahamas, and Luxembourgโ€”have a combined population of just 1.2 million people, but own a staggering $741 billion in Treasuries.

Interest Rates and Treasury Market Dynamics

Over 2022, foreign demand for Treasuries sank 6% as higher interest rates and a strong U.S. dollar made owning these bonds less profitable.

This is because rising interest rates on U.S. debt makes the present value of their future income payments lower. Meanwhile, their prices also fall.

As the chart below shows, this drop in demand is a sharp reversal from 2018-2020, when demand jumped as interest rates hovered at historic lows. A similar trend took place in the decade after the 2008-09 financial crisis when U.S. debt holdings effectively tripled from $2 to $6 trillion.

Foreign Holdings of U.S. Debt

Driving this trend was Chinaโ€™s rapid purchase of Treasuries, which ballooned from $100 billion in 2002 to a peak of $1.3 trillion in 2013. As the countryโ€™s exports and output expanded, it sold yuan and bought dollars to help alleviate exchange rate pressure on its currency.

Fast-forward to today, and global interest-rate uncertaintyโ€”which in turn can impact national currency valuations and therefore demand for Treasuriesโ€”continues to be a factor impacting the future direction of foreign U.S. debt holdings.

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Real Estate

Mapped: The Growth in House Prices by Country

Global house prices were resilient in 2022, rising 6%. We compare nominal and real price growth by country as interest rates surged.

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The Growth in House Prices by Country

Mapped: The Growth in House Prices by Country

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Global housing prices rose an average of 6% annually, between Q4 2021 and Q4 2022.

In real terms that take inflation into account, prices actually fell 2% for the first decline in 12 years. Despite a surge in interest rates and mortgage costs, housing markets were noticeably stable. Real prices remain 7% above pre-pandemic levels.

In this graphic, we show the change in residential property prices with data from the Bank for International Settlements (BIS).

The Growth in House Prices, Ranked

The following dataset from the BIS covers nominal and real house price growth across 58 countries and regions as of the fourth quarter of 2022:

Price Growth
Rank
Country /
Region
Nominal Year-over-Year
Change (%)
Real Year-over-Year
Change (%)
1๐Ÿ‡น๐Ÿ‡ท Tรผrkiye167.951.0
2๐Ÿ‡ท๐Ÿ‡ธ Serbia23.17.0
3๐Ÿ‡ท๐Ÿ‡บ Russia23.19.7
4๐Ÿ‡ฒ๐Ÿ‡ฐ North Macedonia20.61.0
5๐Ÿ‡ฎ๐Ÿ‡ธ Iceland20.39.9
6๐Ÿ‡ญ๐Ÿ‡ท Croatia17.33.6
7๐Ÿ‡ช๐Ÿ‡ช Estonia16.9-3.0
8๐Ÿ‡ฎ๐Ÿ‡ฑ Israel16.811.0
9๐Ÿ‡ญ๐Ÿ‡บ Hungary16.5-5.1
10๐Ÿ‡ฑ๐Ÿ‡น Lithuania16.0-5.5
11๐Ÿ‡ธ๐Ÿ‡ฎ Slovenia15.44.2
12๐Ÿ‡ง๐Ÿ‡ฌ Bulgaria13.4-3.2
13๐Ÿ‡ฌ๐Ÿ‡ท Greece12.23.7
14๐Ÿ‡ต๐Ÿ‡น Portugal11.31.3
15๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom10.0-0.7
16๐Ÿ‡ธ๐Ÿ‡ฐ Slovak Republic9.7-4.8
17
๐Ÿ‡ฆ๐Ÿ‡ช United Arab Emirates
9.62.9
18๐Ÿ‡ต๐Ÿ‡ฑ Poland9.3-6.9
19๐Ÿ‡ฑ๐Ÿ‡ป Latvia9.1-10.2
20๐Ÿ‡ธ๐Ÿ‡ฌ Singapore8.61.9
21๐Ÿ‡ฎ๐Ÿ‡ช Ireland8.6-0.2
22๐Ÿ‡จ๐Ÿ‡ฑ Chile8.2-3.0
23๐Ÿ‡ฏ๐Ÿ‡ต Japan7.93.9
24๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico7.9-0.1
25๐Ÿ‡ต๐Ÿ‡ญ Philippines7.7-0.2
26๐Ÿ‡บ๐Ÿ‡ธ United States7.10.0
27๐Ÿ‡จ๐Ÿ‡ฟ Czechia6.9-7.6
28๐Ÿ‡ท๐Ÿ‡ด Romania6.7-7.5
29๐Ÿ‡ฒ๐Ÿ‡น Malta6.3-0.7
30๐Ÿ‡จ๐Ÿ‡พ Cyprus6.3-2.9
31๐Ÿ‡จ๐Ÿ‡ด Colombia6.3-5.6
32๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg5.6-0.5
33๐Ÿ‡ช๐Ÿ‡ธ Spain5.5-1.1
34๐Ÿ‡จ๐Ÿ‡ญ Switzerland5.42.4
35๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands5.4-5.3
36๐Ÿ‡ฆ๐Ÿ‡น Austria5.2-4.8
37๐Ÿ‡ซ๐Ÿ‡ท France4.8-1.2
38๐Ÿ‡ง๐Ÿ‡ช Belgium4.7-5.7
39๐Ÿ‡น๐Ÿ‡ญ Thailand4.7-1.1
40๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa3.1-4.0
41๐Ÿ‡ฎ๐Ÿ‡ณ India2.8-3.1
42๐Ÿ‡ฎ๐Ÿ‡น Italy2.8-8.0
43๐Ÿ‡ณ๐Ÿ‡ด Norway2.6-3.8
44๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia2.0-3.4
45๐Ÿ‡ต๐Ÿ‡ช Peru1.5-6.3
46๐Ÿ‡ฒ๐Ÿ‡พ Malaysia1.2-2.6
47๐Ÿ‡ฐ๐Ÿ‡ท South Korea-0.1-5.0
48๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco-0.1-7.7
49๐Ÿ‡ง๐Ÿ‡ท Brazil-0.1-5.8
50๐Ÿ‡ซ๐Ÿ‡ฎ Finland-2.3-10.2
51๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark-2.4-10.6
52๐Ÿ‡ฆ๐Ÿ‡บ Australia-3.2-10.2
53๐Ÿ‡ฉ๐Ÿ‡ช Germany-3.6-12.1
54๐Ÿ‡ธ๐Ÿ‡ช Sweden-3.7-13.7
55๐Ÿ‡จ๐Ÿ‡ณ China-3.7-5.4
56๐Ÿ‡จ๐Ÿ‡ฆ Canada-3.8-9.8
57๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand-10.4-16.5
58๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong SAR-13.5-15.1

Tรผrkiyeโ€™s property prices jumped the highest globally, at nearly 168% amid soaring inflation.

Real estate demand has increased alongside declining interest rates. The government drastically cut interest rates from 19% in late 2021 to 8.5% to support a weakening economy.

Many European countries saw some of the highest price growth in nominal terms. A strong labor market and low interest rates pushed up prices, even as mortgage rates broadly doubled across the continent. For real price growth, most countries were in negative territoryโ€”notably Sweden, Germany, and Denmark.

Nominal U.S. housing prices grew just over 7%, while real price growth halted to 0%. Prices have remained elevated given the stubbornly low supply of inventory. In fact, residential prices remain 45% above pre-pandemic levels.

How Do Interest Rates Impact Property Markets?

Global house prices boomed during the pandemic as central banks cut interest rates to prop up economies.

Now, rates have returned to levels last seen before the Global Financial Crisis. On average, rates have increased four percentage points in many major economies. Roughly three-quarters of the countries in the BIS dataset witnessed negative year-over-year real house price growth as of the fourth quarter of 2022.

Interest rates have a large impact on property prices. Cross-country evidence shows that for every one percentage point increase in real interest rates, the growth rate of housing prices tends to fall by about two percentage points.

When Will Housing Prices Fall?

The rise in U.S. interest rates has been counteracted by homeowners being reluctant to sell so they can keep their low mortgage rates. As a result, it is keeping inventory low and prices high. Homeowners canโ€™t sell and keep their low mortgage rates unless they meet strict conditions on a new property.

Additionally, several other factors impact price dynamics. Construction costs, income growth, labor shortages, and population growth all play a role.

With a strong labor market continuing through 2023, stable incomes may help stave off prices from falling. On the other hand, buyers with floating-rate mortgages face steeper costs and may be unable to afford new rates. This could increase housing supply in the market, potentially leading to lower prices.

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