How does Australia's national debt stack up against the G20?
With the Global Financial Crisis in the not too distant past, and the spectre of increasing debt levels looming in the future, looking at the national debt can help shed light on the state of the world’s finances. The national debt of your own country, as well as those of other nations, has far-reaching consequences on how the domestic and global economies operate. This not only affects your own personal finances, but can also reflect the behaviours of debt that can develop in different situations.
The G20 is an international forum for the governments and central bank governors from 20 of the world’s major economies. This includes the US, UK, Australia, Japan, the EU and Russia. By analysing the financial state of these economies, we can get a true indication of the national debt from some of the world’s largest economies. Also, using population statistics, we can compare this amount of national debt and see how it would be split across the population.
What is national debt?
National debt, or government debt as it is sometimes referred, is the debt owed by a country’s central government. This debt is split into internal debt, which is debt owed to lenders within the country, and external debt, or debt owed to foreign lenders.
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National debt by nation: the best and worst performers
Ranked first for the biggest pool of national debt is the European Union (EU), which currently holds USD$14.8 trillion (AUD$16.8 trillion) worth of national debt. As the EU is made up of 28 member states, this number is understandably high, and represents 87.4% of the EU’s Gross Domestic Product (GDP). The country with the lowest national debt was Saudi Arabia, who held USD$87.7 billion (AUD$$99.5 billion) worth of debt, making up 12.2% of their GDP.
National debt per person: the best and worst performers
The nation with the highest national debt per person was Japan. It has a population size that’s one-third of the US, standing at 127.3 million people, yet they have the third highest level of national debt. The per person debt in Japan is USD$88,903 (AUD$101,305). The country with the lowest level of national debt per person was India, who had just USD$691 (AUD$783) worth of debt per person. This is due in part to their relatively low level of national debt, and their high population of 1.3 billion people.
Where does Australia sit?
When it comes to national debt, Australia is in the middle order, coming in at number 13 of the 20 nations. Australia’s national debt comes to USD$485.1 billion (AUD$549.8 billion), representing 32.6% of the country’s GDP.
However, our small population of 23.1 million people, sees us move up the list to rank ninth for national debt per person. With our national debt averaged out, each Australian has around USD$20,971 (AUD$23,769) worth of debt.
How does this affect me?
The level of Australian national debt can help you understand where we sit on the global financial scale. No, we’re not in as good a financial position as those countries in the green, but neither have we slipped so far down the debt scale that our great brown land is coloured red on the debt map.
While you don’t have much control over the way our government spends and saves, you do have control over your own finances. Look at your current debts and your budget. Find ways to get out of debt, or how to avoid getting into debt in the first place. By tracking your spending, reviewing your financial products and finding better deals, you can ensure your debt stays at a manageable level.