Countries With the Highest National Debt: How to Read Sovereign-Debt Risk

“National debt” is usually presented as a single country ranking, but public debt is not one universal statistic. A headline may refer to gross general-government debt, central-government bonds, external debt, debt held by the public, net debt or debt service. Each measure answers a different question.

The IMF’s April 2026 Fiscal Monitor reported that global public debt rose to just under 94% of global GDP in 2025 and is projected to reach 100% by 2029. The IMF describes these figures as estimates and projections based on information available through 1 April 2026.1 The OECD’s Global Debt Report 2026 uses a narrower measure—central-government marketable securities—and reported OECD sovereign bond debt of USD 61 trillion in 2025, with the ratio to GDP projected to rise from 83% in 2025 to 85% in 2026.2

Those figures are not contradictory. They measure different universes. IMF public debt is a broad fiscal concept; the OECD sovereign-borrowing report focuses on central-government marketable debt and debt-management conditions. The World Bank International Debt Statistics focuses primarily on external debt reported by low- and middle-income countries through the Debtor Reporting System.3

This article therefore does not reproduce an undated “top 20 most indebted countries” list. It explains why rankings change with the denominator and coverage, how debt sustainability works, why interest rates and refinancing matter, and why Japan, the United States, Greece and emerging-market borrowers cannot be judged by the same ratio alone.

Core principle: A high debt-to-GDP ratio is a balance-sheet warning, not an automatic default date. The risk depends on interest costs, economic growth, primary balances, maturity, currency denomination, investor confidence, institutions and the ability to refinance.

The short answer

Countries often appearing near the high end of gross public-debt-to-GDP comparisons include Japan, Greece, Italy, the United States and other advanced economies with large accumulated borrowing. Emerging and developing economies may have lower debt-to-GDP ratios but face more severe financing risk when debt is denominated in foreign currency, maturities are short, reserves are limited, interest rates are high or market access is fragile.

That sentence is intentionally cautious. A precise ranking needs a named source, date, debt concept and denominator. The IMF’s Global Debt Database and Fiscal Monitor provide broad public-debt and fiscal data.1 4 The OECD sovereign-borrowing report provides central-government marketable-debt and refinancing data for OECD countries.2 The World Bank IDS provides external-debt data for reporting low- and middle-income countries.3

Question	Metric	What it reveals
How large is government debt relative to the economy?	Gross general-government debt-to-GDP	Scale of liabilities under a broad public-sector definition.
How much debt does the public hold?	Debt held by the public	Liabilities excluding some intragovernmental holdings.
What remains after public financial assets?	Net debt-to-GDP	Debt less selected financial assets, subject to valuation and coverage.
How exposed is the state to foreign lenders?	External debt and foreign-currency share	Currency and external-financing risk.
How much must be raised soon?	Gross borrowing and refinancing requirements	Rollover and market-absorption risk.
How much budget goes to creditors?	Interest expenditure and debt service	Fiscal space and vulnerability to higher rates.
Can debt stabilise?	Interest-growth differential and primary balance	Direction of the debt ratio under assumptions.

The “most indebted” country may differ under every row. A country can have a high gross ratio, low foreign-currency exposure and long maturities, while another has a lower ratio but high short-term refinancing needs. The second may face the more immediate market risk.

What is national or sovereign debt?

Sovereign debt is the stock of financial obligations issued or assumed by a government. National debt is often used as a synonym, but the exact institutional coverage varies. General government can include central government, state or provincial governments, local authorities and social-security funds. Central-government debt excludes some of those entities.

Debt instruments include government bonds, treasury bills, loans, deposits, pension liabilities, accounts payable, guarantees and other obligations. Some are recorded in headline debt; others appear as contingent liabilities or broader fiscal risks. A government may also own financial assets, but gross and net debt use different presentations.

The OECD explains that its Sovereign Borrowing Outlook analyses central-government marketable securities. It does not cover every component of general-government debt.2 The World Bank IDS focuses on external debt reported by eligible low- and middle-income countries and includes public and publicly guaranteed external debt.3 Comparing the two as if they were one series would be an accounting error.

Debt concept	Meaning	Typical limitation
Gross debt	Total liabilities under a defined government perimeter	Does not subtract public financial assets.
Net debt	Gross debt minus selected financial assets	Asset quality, valuation and coverage differ.
General-government debt	Central, state, local and social-security sectors under the source’s definition	May differ from central-government marketable debt.
Central-government debt	Debt of the central authority	Omits subnational and social-security obligations.
Domestic debt	Debt issued under domestic law or held in domestic markets, depending on source	“Domestic” can refer to law, market or investor residence.
External debt	Debt owed to non-residents under the source’s definition	Currency, residence and instrument definitions matter.
Marketable debt	Bonds and securities traded in financial markets	Omits loans and non-market liabilities.
Debt service	Interest and principal payments due	A flow, not the outstanding debt stock.

A credible article names the source definition before quoting a percentage.

Why debt-to-GDP is the most common ratio

Debt-to-GDP divides a government-debt stock by the annual value of economic output. GDP is used as a broad scale variable because a larger economy generally has a larger tax base and more resources with which to service public obligations. The ratio is useful for comparing the size of public liabilities with the economy, but GDP is not government revenue and cannot be spent directly on interest payments.

The ratio can change for several reasons:

• New borrowing increases the debt stock.
• Primary budget deficits add to borrowing before interest.
• Interest costs increase liabilities.
• Nominal GDP growth raises the denominator.
• Inflation raises nominal GDP and can reduce the ratio mechanically.
• Exchange-rate movements change the domestic value of foreign-currency debt or the dollar value of local-currency debt.
• Privatisations, debt restructurings and statistical revisions change the numerator.

A declining debt-to-GDP ratio does not always mean the government repaid debt. The denominator may have grown rapidly because of inflation or real growth. A rising ratio does not always mean a crisis is imminent; a government may have borrowed to finance productive investment or a temporary shock while retaining market access.

Gross debt versus net debt

Gross debt shows the liabilities that must be serviced under a defined sector perimeter. Net debt subtracts specified financial assets, such as deposits, securities and loans. Net debt can provide additional context, but it is not automatically a better measure.

Financial assets may be illiquid, risky, pledged, denominated in another currency or held for policy purposes. A public pension asset may not be available to fund the next bond maturity. A central bank’s balance sheet can include government securities, but consolidating government and central-bank accounts requires careful national-accounts treatment.

Gross debt is often more comparable for market and debt-management questions because investors care about the securities they hold and the payments due. Net debt can be useful for fiscal capacity when the assets are liquid and reliably valued. Both should be labelled.

The difference is especially important for countries with large public financial assets or sovereign wealth funds. Assets can reduce net exposure, but they do not remove the need to roll over bonds or meet cash interest payments. The correct question is whether the asset can be mobilised without damaging financial stability or public services.

The debt-dynamics equation

A simplified debt-dynamics framework helps explain sustainability. Let the debt-to-GDP ratio be d, the nominal interest rate on debt be i, nominal GDP growth be g, and the primary balance as a share of GDP be p, with a primary deficit represented by a negative balance under one convention. A simplified change in the debt ratio can be expressed as:

Change in debt-to-GDP ≈ ((i − g) / (1 + g)) × previous debt-to-GDP − primary balance contribution + stock-flow adjustments.

The precise sign convention depends on how the primary balance is defined. The intuition is more important than memorising a threshold:

• If the effective interest rate exceeds nominal growth, existing debt tends to push the ratio higher unless the government runs a sufficient primary surplus.
• If nominal growth exceeds the interest rate, the denominator can help stabilise the ratio, but deficits can still make it rise.
• Exchange-rate changes, bank rescues, pension recognition and other stock-flow adjustments can move debt independently of the annual deficit.

The equation does not forecast a crisis. It organises the questions: what rate does the government pay, how fast is nominal GDP growing, what is the primary balance, and what one-off obligations could change the stock?

Primary deficit, primary surplus and interest costs

The primary balance is the budget balance before interest payments. A primary deficit means government spending excluding interest exceeds revenue; a primary surplus means revenue exceeds non-interest spending.

Two countries can have the same debt-to-GDP ratio but different trajectories. The first may run a primary surplus and have a low effective interest rate. The second may run a persistent primary deficit while refinancing at higher yields. The ratio can stabilise in the first and rise quickly in the second.

Interest expenditure is a budget-flow measure. The OECD reported aggregate OECD interest expenditures at 3.3% of GDP in its 2026 Global Debt Report, close to the previous decade’s peak.2 That is an aggregate figure, not a country-specific fiscal threshold. Interest costs can rise when debt is refinanced at higher rates, even if the outstanding stock changes slowly.

Debt service crowds out other spending when a larger share of revenue goes to creditors. Governments may respond with tax increases, spending cuts, inflation, growth policies, restructuring or additional borrowing. Each has economic and political consequences. A high ratio is more concerning when interest costs are rising faster than revenues and the primary balance cannot adjust without severe disruption.

Refinancing and rollover risk

Refinancing risk is the risk that a government must replace maturing debt when market conditions are unfavourable. A government does not normally repay all debt from one year’s tax revenue; it issues new securities to repay maturing ones. This is sustainable when investors continue to buy at manageable yields.

The maturity structure matters. Short-term treasury bills may be cheaper when the yield curve is steep, but they mature frequently and expose the government to rate resets. Long-term bonds lock in funding and reduce rollover frequency but may cost more at issuance. Inflation-linked or foreign-currency bonds distribute risk differently.

The OECD’s 2026 report says OECD refinancing requirements reached around USD 13.5 trillion in 2025 and are projected to reach USD 14 trillion in 2026. It says gross borrowing is projected around USD 18 trillion in 2026, with treasury bills and shorter maturities playing an important role in issuance strategies.2 The report also notes that shorter issuance can limit long-term costs ex ante while increasing near- and medium-term refinancing risks.

Debt feature	Potential advantage	Potential risk
Short maturity	Lower initial cost or flexible cash management	Frequent rollover and rate-reset exposure.
Long maturity	More predictable refinancing schedule	Higher issuance cost and duration risk.
Fixed-rate bonds	Payments do not reset immediately	Market value falls when yields rise; refinancing still matters later.
Floating-rate debt	Can be cheaper initially	Interest expense rises quickly with policy rates.
Inflation-linked debt	Can lower nominal borrowing cost in low inflation	Payments rise with inflation.
Domestic-currency debt	Reduces direct foreign-currency default exposure	Inflation and currency credibility costs remain.
Foreign-currency debt	May access deeper or cheaper markets	Depreciation increases local-currency burden.

Rollover risk is not equivalent to default risk. It becomes severe when investors lose confidence, maturities are concentrated, reserves are inadequate or the government cannot adjust its budget.

Domestic versus foreign-currency debt

Currency denomination is one reason debt-to-GDP ratios cannot be interpreted identically across countries. A government that borrows mostly in its own currency is not exposed to a sudden increase in the domestic value of foreign-currency principal caused by depreciation. It can still face inflation, higher yields, capital flight and loss of purchasing power, but the default channel differs.

A government with substantial foreign-currency debt must obtain foreign currency through exports, reserves, new borrowing, official financing or asset sales. If its local currency falls, the domestic-currency value of the debt and interest payments rises. A balance-sheet mismatch can turn an exchange-rate shock into a fiscal crisis.

Currency sovereignty is not a free pass. A government that can issue the currency in which it owes may avoid a technical inability to print the currency, but monetising debt can create inflation, currency depreciation and loss of real income. Investors can demand higher yields, shorten maturities or shift into other assets.

External debt is also different from debt held by foreign investors. A bond issued under domestic law and bought by a non-resident may be classified differently from a foreign-currency loan from an external creditor. The source’s residence and instrument rules must be checked.

Japan: high debt and institutional structure

Japan is frequently described as having one of the highest public-debt ratios among major economies. The useful analytical question is not whether the ratio is high—it is—but how the debt is financed, who holds it, what currency it is denominated in, how long the maturities are, how interest rates are changing and what the primary balance and growth outlook imply.

Japan’s case demonstrates that a high ratio can coexist with long periods of low borrowing costs and domestic-currency financing. That does not mean debt is costless. If interest rates rise and maturing bonds are refinanced at higher yields, interest expenditure can increase gradually through the stock of debt. Population ageing, social spending, growth, inflation and central-bank normalisation all influence the path.

A government’s investor base can reduce or increase market volatility, but domestic ownership does not guarantee safety. Domestic institutions can reallocate portfolios, households can change savings behaviour and the central bank can change its purchase programme. The appropriate conclusion is that debt composition affects transmission; it does not eliminate fiscal trade-offs.

United States: large absolute debt and reserve-currency advantages

The United States has the largest sovereign-debt stock in absolute currency terms and is a major driver of aggregate OECD borrowing and refinancing requirements. The OECD reported that the United States and Japan together represented close to 80% of OECD refinancing requirements in 2025, with the US share increasing in the report’s comparison.2

The United States benefits from a deep Treasury market, a widely used currency and substantial demand for dollar assets. Those features support market access and liquidity. They do not imply that deficits and interest costs are irrelevant. Higher yields, larger interest payments, political constraints, debt-ceiling disputes and reduced demand for long-duration Treasuries can all affect fiscal conditions.

The IMF’s 2026 Fiscal Monitor also points to structural shifts in sovereign-debt markets, including a growing role for leveraged nonbank intermediaries and erosion of the US Treasury’s safety premium.1 This is a market-structure observation, not a prediction of imminent default. It means that a traditionally liquid market can still face repricing and volatility when supply, demand and risk perceptions change.

Greece and the euro-area lesson

Greece’s debt crisis illustrates why currency, creditors, growth and market access matter. A member of a currency union borrows in a currency it does not individually issue. It cannot independently create euros to meet obligations, and its fiscal adjustment occurs within a shared monetary and legal framework.

The Greek crisis also involved recession, high debt service, fiscal adjustment, banking stress, official assistance and restructuring. The lesson is not that every euro-area country with a high ratio will repeat the episode. It is that a debt ratio must be interpreted with the monetary regime, investor base, official backstops and fiscal institutions.

A country with monetary sovereignty can still lose market confidence, experience inflation or face external constraints. A country in a monetary union can have deep capital-market support and shared institutions. Neither label alone determines sustainability.

Emerging markets and external-debt risk

Emerging and developing economies may face a different combination of risks. External debt, foreign-currency loans, short maturities, high global interest rates, commodity dependence and limited reserves can make refinancing difficult. The World Bank IDS provides external-debt stocks and flows for low- and middle-income countries that report public and publicly guaranteed external debt through the Debtor Reporting System.3

The World Bank’s data coverage is valuable but not a universal ranking of all public debt. It is designed around external-debt reporting and has a specific country and instrument scope. A country can have manageable external debt but high domestic debt, or low public debt but significant private-sector foreign-currency obligations that could become a contingent public risk.

Debt restructuring may be required when a government cannot meet obligations under existing terms. Restructuring can involve maturity extension, interest reduction, principal reduction, official financing or a combination. It usually creates economic and social costs, including reduced market access and banking-sector stress. The timing and burden depend on the legal instruments and creditor composition.

Debt and growth

Borrowing can finance infrastructure, health, education, disaster response, stabilisation and investment that raises future productive capacity. It can also finance recurring deficits without a credible adjustment plan. The growth effect depends on the use of funds, project quality, corruption controls, taxation, monetary conditions and the return relative to borrowing costs.

The IMF and OECD both emphasise that debt sustainability is not a single ratio. The fiscal outlook must connect borrowing with growth, interest payments, spending pressures and market conditions.1 2

If public investment raises productivity and growth, the denominator can improve and future revenue may support debt service. If borrowing only funds consumption or losses, the debt stock rises without an offsetting revenue base. Cutting productive investment to protect a headline deficit can also harm long-term growth. Fiscal adjustment therefore requires composition, not only arithmetic.

Contingent liabilities and hidden fiscal risks

Official debt statistics may not fully capture every risk that could reach the public balance sheet. Government guarantees, public-sector pension commitments, state-owned enterprises, public-private partnerships, bank rescues, natural disasters and energy subsidies can create contingent liabilities.

A guarantee is not necessarily debt today, but it becomes a fiscal obligation if the guaranteed borrower defaults. A public bank may carry losses that eventually require recapitalisation. A pension commitment may be recorded differently from a bond. Fiscal-risk statements and debt-sustainability analyses examine these channels.

This is another reason not to use a headline ranking as a complete risk assessment. A country with lower reported debt but large unrecognised guarantees may face more fiscal risk than the table suggests. A country with high transparent debt and strong reporting may look worse simply because its obligations are measured more completely.

Debt ceilings, default and restructuring

Countries do not usually “go bankrupt” in the same legal way as corporations, but they can default, delay payments, restructure or seek official assistance. The legal mechanism depends on domestic law, bond clauses, creditor type, currency, jurisdiction and international institutions.

Default risk is not determined by a universal debt-to-GDP threshold. It rises when a government cannot roll over maturing debt, cannot generate foreign currency for external obligations, faces a sudden yield increase, loses reserves or cannot secure political support for adjustment. A low ratio can still become dangerous after a currency collapse; a high ratio can remain financeable for years under favourable conditions.

Credit ratings and market yields provide information but are not infallible. A yield increase can reflect global rates, inflation expectations, liquidity and risk appetite rather than only country-specific solvency. A spread can compress because of official support without eliminating underlying debt dynamics.

How to compare national-debt rankings responsibly

Start with the source’s perimeter. IMF general-government debt, OECD central-government marketable bonds and World Bank external debt answer different questions. Then record the reference year and whether the figure is actual, estimated or projected.

Next, add composition. Show domestic and foreign-currency shares, average maturity, fixed versus floating rates, investor residence, official versus private creditors and the share of debt maturing within one year. Add fiscal flows: primary balance, interest expenditure, revenue and growth.

Finally, assess institutions and market access. Does the government have a credible fiscal framework, a stable investor base, liquid domestic markets, foreign reserves, a lender of last resort or access to official support? The answer cannot be inferred from the debt ratio.

Analytical layer	Questions
Definition	General government or central government? Gross or net?
Instrument	Bonds, bills, loans, guarantees or pensions?
Currency	Domestic or foreign currency? Under whose law?
Maturity	How much debt is due soon? What is the average maturity?
Flow	What are the primary balance and interest costs?
Growth	Is nominal GDP growing faster or slower than the effective interest rate?
Market	Who buys the debt and how liquid is the market?
Shock	What happens after a rate rise, currency fall, recession or disaster?
Institutions	Are fiscal statistics, budgets and debt-management plans credible?

Common mistakes in national-debt articles

The first mistake is using the phrase “national debt” without defining it. The second is ranking gross debt-to-GDP alongside external debt-to-GDP. The third is comparing an IMF general-government figure with an OECD central-government marketable-debt figure. The fourth is treating a forecast as a realized observation.

The fifth is claiming that a debt ratio above a particular threshold automatically causes default. The sixth is ignoring interest rates, nominal growth and primary balances. The seventh is ignoring maturity and refinancing. The eighth is assuming domestic-currency debt has no cost.

The ninth is treating foreign ownership as identical to foreign-currency debt. The tenth is ignoring public financial assets when discussing net debt. The eleventh is ignoring contingent liabilities. The twelfth is comparing an advanced economy’s domestic debt with a low-income country’s external debt as if both faced the same constraints.

The thirteenth is quoting the largest absolute debt stock as the most indebted country without normalising by GDP or revenue. The fourteenth is using a market yield as a pure solvency measure. The fifteenth is turning a macroeconomic ranking into personal investment advice.

Frequently asked questions

Which country has the highest national debt?

The answer depends on the measure. The United States has the largest absolute sovereign-debt stock, while Japan, Greece, Italy and other countries have appeared near the high end of gross debt-to-GDP comparisons under different datasets and years. A responsible answer must name the source, debt perimeter, denominator and reference date.

Is high debt-to-GDP always dangerous?

No. Debt sustainability depends on interest rates, nominal growth, primary balances, maturity, currency, market access, institutions and contingent liabilities. High debt can remain financeable under some structures, while lower debt can become risky after a currency or refinancing shock.

What is the difference between gross and net government debt?

Gross debt measures liabilities. Net debt subtracts selected public financial assets. Net debt may provide useful context but depends on asset quality, liquidity, valuation and consolidation rules. Neither measure is universally superior.

Why is Japan able to carry high public debt?

Japan’s debt is supported by domestic-currency financing, a large financial system, a substantial domestic investor base and long-standing market access. These features change the risk channels but do not eliminate interest-rate, growth, ageing, inflation or refinancing risks.

Why is US debt different from debt in a developing economy?

The United States issues debt in dollars, has a deep Treasury market and benefits from the dollar’s international role. Many developing economies face greater foreign-currency, external-financing or reserve constraints. The US still faces rising interest costs, fiscal pressure and market-repricing risks.1 2

Can a country print money to repay debt?

A government with monetary sovereignty can issue its own currency, but creating money to finance debt can cause inflation, currency depreciation and loss of purchasing power. It does not make borrowing costless or guarantee market confidence.

What is debt service?

Debt service is the interest and principal payments due over a period. It is a flow measure. A country can have a high debt stock with manageable current service if maturities are long and rates are low, or a lower stock with severe service pressure if rates and maturities are unfavourable.

What is refinancing risk?

Refinancing risk is the possibility that a government cannot replace maturing debt on acceptable terms. It increases when maturities are short, borrowing needs are large, investor demand weakens or market yields rise.

Does government debt always hurt economic growth?

No. Borrowing can finance productive investment and crisis support. It can reduce future fiscal space when it funds persistent deficits without a credible return or when interest costs rise faster than growth. The quality and use of borrowing matter.

Can national debt affect household finances?

Yes. Debt service can influence taxes, public spending, inflation, interest rates, employment and financial stability. The effect varies by country and policy response. A national debt ranking cannot tell an individual whether to buy a bond, move money or change personal borrowing.

Conclusion

There is no single “most indebted country” answer that is valid for every purpose. The IMF’s broad public-debt outlook, the OECD’s central-government marketable-debt analysis and the World Bank’s external-debt statistics cover different parts of the sovereign balance sheet.1 2 3

The IMF’s April 2026 Fiscal Monitor projects global public debt at 100% of GDP by 2029, while the OECD projects its central-government marketable-debt ratio at 85% of GDP for the OECD area in 2026. These are dated estimates and projections, not universal crisis thresholds.1 2

The right question is not merely how large the debt stock is. It is who owes it, to whom, in which currency, at what maturity, at what interest cost, against what revenue base, and with what ability to refinance after a shock?

A high debt ratio may be sustainable under one institutional structure and dangerous under another. Reliable analysis therefore reports the definition, reference date, actual-versus-projected status, debt composition, interest burden and market-access conditions instead of copying an undated league table.

This is research and analysis only, not personalized financial advice.

Related Reading

• Countries With the Highest Household Debt
• Countries With the Largest Economies by GDP
• Countries With the Highest Inflation Rates
• Countries With the Highest Income Inequality
• Countries That Give the Most Foreign Aid

References