India’s economy has experienced many ups and downs, mainly driven by domestic consumption, infrastructure investment, and policy reforms. Like many other developing nations, it also faces challenges in managing public debt. India’s debt-to-GDP ratio has hovered between 65 and 80 percent for many decades, maintaining the balance between economic growth and fiscal debts.
Globally, government debt has increased since the 2019 pandemic. Developed countries like the US, France, and the UK have debt levels that exceed 100 percent of their GDP. By analysing the debt-to-GDP ratio across countries, we gain insights into how these levels impact inflation, interest rates, and long-term economic stability.
In this post, we’ll discuss the debt-to-GDP ratios of the world’s largest economies, why this ratio matters, and the factors influencing it.
The ratio is calculated using the formula:
Hypothetically, if a country’s government debt is $1000 and its GDP is $350, the debt-to-GDP ratio will be 2.857, or 285.7 percent. This ratio is a key measure of financial stability and future growth potential.
First Published: Jun 18, 2025, 16:47
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