6 Countries Have More Debt Than Their Economy

[Economy 52,997]

https://tradingeconomics.com/country-list/households-debt-to-gdp

 

Total Consumer debt in these 6 Nations is higher than the entire Nations annual economic output. Debt such as mortgages, car loans, student loans, credit cards etc

 

Countries with exceptionally high consumer debt are at the highest risks of financial meltdowns such as what happened to the United States in 2007/2008

 

1. Switzerland: 128.8% of GDP

2. Australia: 121.3% of GDP

3. Denmark: 117% of GDP

4. Netherlands: 103.6% of GDP

5. Norway: 101.4% of GDP

6 Canada: 100.2% of GDP

 

Other major economies by comparison:

 

UK: 86.3% of GDP

USA: 76.6% of GDP

France: 59.1% of GDP

Japan: 57.4% of GDP

Germany: 52.5% of GDP

Italy: 41% of GDP

 

 

 

[malazam 15,710]

I wasn’t expecting that list at all.

[Economy 52,997]

@Luc @Lord Temptation

 

Your Countries got me beat

 

Tho these rankings vary slightly depending on what exactly is factored in

 

I know for private sector debt (so including companies) Australia was the worst in the world and then Canada was second worst

 

But interestingly, most of these Nations with high consumer debt in turn have low government debt. Im curious on your perspective why that tends to be the case @Woolfsmck

 

These nations I listed at the bottom like Italy and Japan and USA with lower consumer debt have way higher government debt

[Curunir 7,510]

I don't know a lot about economy, so bear with me if I sound stupid 

Weren't those 6 countries basically left unscathed by the financial crisis back in 2008/2009?

Countries like Greece, Spain and Portugal are struggling to this day to recover from it, whereas the ones listed recovered from it quite quickly (if they needed any recovery at all) and are one of the richest countries in the world 

EDIT: Mess, completely missed the part where we're talking about consumer debt and not government debt 

[Chuckles 2,549]

5 minutes ago, Economy said:

@Luc @Lord Temptation

 

Your Countries got me beat

 

Tho these rankings vary slightly depending on what exactly is factored in

 

I know for private sector debt (so including companies) Australia was the worst in the world and then Canada was second worst

 

But interestingly, most of these Nations with high consumer debt in turn have low government debt

 

These nations I listed at the bottom line Italy and Japan and USA with lower cost sumer debt have way higher government debt

I was just about to ask what are the factors considered for this 

[Sorcerer 12,526]

I'm expecting low income countries to get here.  I guess many people in wealthy nations spend too much, like in the US last decade.

I hope they fix this quickly because a financial meltdown from these nations will greatly affect other countries as well.

[Economy 52,997]

Just now, malazam said:

I wasn’t expecting that list at all.

These countries mostly avoided the severe downturn of 2008 and so banks kept lending and people kept borrowing in Nations like these

 

Because banks kept lending and interest rates were lowered to fight any effect of recession some of these Countries that escaped most of the recession ended up with surging real-estate prices and exploding consumer debt

 

Canada, Norway, Denmark, Switzerland, Australia, Netherlands on this list all have had real estate prices go way up and also consumers binge on debt

 

Some other Countries like Finland and Sweden had similar issues although I guess not quite bad enough to be above 100% of their GDP

 

Countries that did poorly in recession like USA, Italy for example actually had debt levels fall because real-estate prices fell and also banks reduced lending meant consumers were paying off more debt than they were borrowing

 

Interestingly tho, most of these Nations with high consumer debt have low Government debt (Canada & Australia in particular have very low government debt).... But countries with low consumer debt on this list have a lot of government debt

 

It's like they work in reverse to one another

[Economy 52,997]

Just now, Curunir said:

I don't know a lot about economy, so bear with me if I sound stupid 

Weren't those 6 countries basically left unscathed by the financial crisis back in 2008/2009?

Countries like Greece, Spain and Portugal are struggling to this day to recover from it, whereas the ones listed recovered from it quite quickly (if they needed any recovery at all) and are one of the richest countries in the world 

Yes. Finland and Sweden also mostly unscathed and they have high consumer debt as well

 

What happened is in these countries banks didn't stop lending and real-estate didn't get the kind of correction most of the world got and prices kept going up

 

While in most Nations consumers were forced to focus on repaying loans or put off buying houses etc because credit was tight...

 

In Nations that avoided the worse of the financial crisis the spending sprees continued and there was no correction... And because rates have stayed low the debt has continued to pile on the last few years to gigantic proportions

 

Here's something to put it into perspective how bad it's gotten in some of these countries

 

In USA in 2007 before the crash consumer debt averaged 134% of disposable income. In Canada right now and in much of northern Europe by comparison consumer debt is over 170% of disposable income way worse than it ever got in the US

[Economy 52,997]

2 minutes ago, LabCoatDude said:

I'm expecting low income countries to get here.  I guess many people in wealthy nations spend too much, like in the US last decade.

I hope they fix this quickly because a financial meltdown from these nations will greatly affect other countries as well.

Nations that do well ironically tend to also have a more leveraged economy with it

 

Countries that are doing poorly tend to have less lending and credit available also people tend to be more cautious as well due to bad economy even if credit is available to them

 

Sometimes there's exceptions but this is how it tends to go

[Economy 52,997]

5 minutes ago, Chuckles said:

I was just about to ask what are the factors considered for this 

This is household debt. So mortgages, car loans, student debt, credit card debt etc

 

I saw a list recently for private sector debt so it included all of this but also debt from Companies as well and on that list Australia was the worst and then Canada was #2 but the other 6 more or less were also the worst on that list as well only the order was slightly different

[Reject False Icons 4,966]

So I don't know much about economy but I'm glad to be learning in ggd. I have a question indeed  

These numbers and some others could indicate that some countries are a time bomb that will inevitably explode or it's uncertain to know that precisely

[Economy 52,997]

4 minutes ago, Dream Rider said:

So I don't know much about economy but I'm glad to be learning in ggd. I have a question indeed  

These numbers and some others could indicate that some countries are a time bomb that will inevitably explode or it's uncertain to know that precisely

Time will tell. Not all bubbles burst some can deflate

 

If conditions are just right sometimes big imbalances can gradually correct rather than cause a sudden crash

 

But it's hard to know what will happen before it happens

[RAMROD 117,694]

That typical "all Switzerland peoples are wealthy af" notion are now crushed

[GypsyBabe 22,836]

@Teal Ambition Tell your country to get its sh*t together. 

[JustinTrudeau 2,419]

Dang, I didn't expect this list. But Canadians do spend a lot of money and drive themselves into debt.