The United States is the most indebted country in the world—and in world history. The U.S. government currently owes 38 trillion dollars, which is 125% of its annual GDP.
The second most indebted country is China, whose government owes 18.7 trillion dollars, equal to 96% of China’s annual GDP.
However, despite these large numbers, the economies of both countries face no major risk because most of their debt is borrowed from their own banks and citizens, not from foreign lenders.
Japan’s debt, when measured in dollars, is smaller than that of the U.S. and China. But when compared to the size of its economy, Japan is the most heavily indebted country in the world. Japan’s total debt is more than 230% of its annual GDP, over twice the size of its economy.
It is important to note that in 1971, when East Pakistan became Bangladesh, the economy of East Pakistan was almost non-existent. Bangladesh had a larger population but a far smaller GDP than Pakistan.
Today, Bangladesh’s population is smaller than Pakistan’s, yet its GDP is much larger. This is why the standard of living in Bangladesh is improving rapidly. Bangladesh also has much lower debt compared to Pakistan.