Rankings of the most indebted countries are based on the total government debt as a percentage of GDP, a commonly used metric to compare debt burdens across different economies.
According to the International Monetary Fund's 2026 data, Japan's government debt exceeds double its annual economy size, with Singapore, Sudan, and Bahrain also recording high levels.
It is crucial to differentiate between the size of debt in dollar terms and the debt-to-GDP ratio. A large economy might have a massive amount of debt in absolute terms but may not rank top when debt is measured against its economy size.
List of the Most Indebted Countries in the World:
1. Japan
Japan tops the list in 2026, with government debt reaching around 204.4% of its GDP. This means the government debt is more than twice the country's annual economic output, linked to long-term factors like high public spending and the aging population.
Japan's financial situation evaluation goes beyond percentage alone, encompassing debt ownership nature, financing sources, and economic structure in determining risk levels.
2. Singapore
Singapore ranks second with a government debt-to-GDP ratio of around 171.9%.
Despite the high figure, understanding Singapore's debt requires insight into the nation's financial system, where government debt composition and counterpart assets differ from other global cases. Thus, debt-to-GDP ratio alone isn't a sufficient indicator of a country's ability to meet obligations.
3. Sudan
Sudan comes in third, with estimates putting government debt at about 169.1% of GDP in 2026. The elevated percentage reflects challenging economic and fiscal conditions affecting growth and public finance, making the debt increase more sensitive compared to more stable economies.
4. Bahrain
Bahrain ranks fourth globally, with government debt reaching around 152.4% of GDP. The rising debt poses a challenge to public finances, especially with the need to balance government spending with economic growth and public revenues.
5. Italy
Italy ranks fifth, with government debt at about 138.4% of GDP. As one of Europe's highest public debt economies, it receives ongoing attention due to borrowing costs and economic growth impacts on managing debt.
6. Greece
Greece ranks sixth, with a debt ratio of around 136.9% of GDP. Although Greek debt remains high, factors like debt trajectory, economic growth, and government financial outcomes are essential when assessing the nation's financial standing, beyond current ratio.
7. Senegal
Senegal is seventh in the rankings, with a government debt ratio of around 132.3% of GDP. This level reflects high government obligations relative to economic size, with public finance management and economic growth being vital to debt service capacity.
8. Maldives
The Maldives ranks eighth worldwide, with government debt at about 129.4% of GDP. Smaller economies usually face greater sensitivity to rising debt, especially when revenues hinge on few sectors. In the Maldives, tourism is a key economic driver.
9. United States
The United States ranks ninth in debt-to-GDP ratio, at about 125.8% of GDP in 2026. Despite not topping the ratio list, the US holds one of the largest absolute government debts globally, due to its massive economy and government spending levels.
10. Ukraine
Ukraine ranks tenth, with government debt reaching about 122.6% of GDP. Ukrainian public finances are heavily influenced by exceptional wartime conditions, affecting government spending, economy, and financing needs.
What Does the Debt-to-GDP Ratio Mean?
It measures government debt against the total value of goods and services the economy produces in a year. For instance, a 100% ratio implies government debt roughly equals annual GDP. A ratio surpassing 200% means debt is over double the annual GDP.
However, a high ratio doesn't automatically signify a country's inability to repay; factors like interest rates, government revenues, economic growth, debt composition, and holders impact evaluations.
Does High Debt Make a Country More Prone to Bankruptcy?
Not necessarily. High government debt might be manageable in nations with strong economies, stable financial institutions, deep domestic debt markets, and consistent borrowing capabilities.
Conversely, a country with a lower debt ratio might face a financial crisis if it has weak revenues, high borrowing costs, or significant foreign currency debt. Hence, economists consider a wide range of indicators beyond debt-to-GDP ratio in assessing financial sustainability.
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