After failing to come up with $78 million for bond payments within the set grace period, Sri Lanka has officially announced a pre-emptive default, the first in the country's history according to Bloomberg. The economic situation in the country has caused inflation to climb up to 30 percent, with forecasts claiming a possible increase to 40 percent. As our chart based on International Monetary Fund (IMF) data shows, the Asian country isn't the only one that seems to have seriously overextended its finances.
Venezuela's government, for example, has racked up debt worth three times its annual gross domestic product (GDP). While entries like Greece, Cyprus or Portugal might be no big surprise on this list, two of the biggest economies of the world are also featured in the top 8 according to estimated government debt in share of GDP. Japan, which ranked third in terms of GDP in 2020 with roughly $5 trillion comes in second with government debt amounting to 254 percent of its GDP. This can be attributed to a decades-long development starting with the bursting of the country's asset price bubble in 1991 and further downturns due to the 2007 financial crisis, the 2011 Tōhoku Earthquake and the fallout of the coronavirus pandemic. The United States also feature prominently on this list, with the second-largest economy in the world ranking sixth with debt worth 134 percent of its GDP in 2020.
While the IMF collected and analyzed the corresponding numbers from 88 countries, a majority of the world's nations is left out due to a lack of data. Most countries from Sub-Saharan Africa and the MENA region don't feature in this list, which can still serve as a general indicator of the debt level of more well-off states in Europe, Asia and the Americas.
