Saturday, July 30, 2011

Levels of External Debt

One of the most common questions I get asked is about levels of UK debt.

There are also different types of debt. For example, external debt measures gross liabilities of both public and private sector to the rest of the world. (This is very different to public sector debt / national debt)

For example, UK external debt is over £6,000bn (400% of GDP). This sounds terrifying, but, UK assets are pretty similar. The country with the highest external debt is Luxembourg; their external is 3,443% of GDP. This doesn't mean Luxembourg is on the verge of bankruptcy. It just reflects the fact their economy is based on international banking.

Also, the government only contribute a small fraction to the gross external debt.

It's hard work keeping on top of different debt statistics.

Further Reading

No comments: