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Top 20 countries by debt-to-GDP ratio: Where India stands among the largest economies

Understand how the debt-to-GDP ratio plays a key role in the economy and explore the list of the top 20 economies in the world

By Forbes India

Published: Jun 18, 2025 04:47:29 PM IST

Updated: Jun 18, 2025 04:47:19 PM IST

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.

Why does the debt-to-GDP ratio matter?

The debt-to-GDP ratio compares total government debt as a percentage of the country’s gross domestic product (GDP). It shows how much a country owes compared to what it produces. A lower ratio means a country is better positioned to manage its debt, while a higher ratio raises concerns about its economy. A country with a high debt-to-GDP ratio often has trouble repaying external debts, which are called public debts.

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.

Government debt as a percentage of GDP of the top 20 economies worldwide

Based on the data sourced from the International Monetary Fund (IMF), here’s the list of the top 20 economies and their government debt-to-GDP ratios:

Debt Rank	Country	Debt-to-GDP Ratio (%)	GDP Rank
1	Japan	249.67	5
2	Italy	134.79	8
3	France	109.88	7
4	Canada	107.49	9
5	Spain	105.03	12
6	United Kingdom	100.03	6
7	United States	118.73	1
8	Brazil	84.68	10
9	China	84.38	2
10	India	83.02	4
11	Germany	62.66	3
12	Mexico	53.1	15
13	Poland	49.59	20
14	Australia	49.01	14
15	South Korea	45.5	13
16	Netherlands	45.02	18
17	Indonesia	39.6	17
18	Türkiye	29.26	16
19	Saudi Arabia	26.23	19
20	Russia	19.55	11

India's debt-to-GDP ratio: Current and history

India's debt-to-GDP ratio has remained stable over the years. In 2024, the ratio recorded was 83.1 percent, reflecting a total debt of over $2,144 billion. The ratio has increased from 75 percent in 2019 to 83 percent in 2023, the post-COVID era. India recorded the lowest debt-to-GDP ratio in 1990, which was 50.7 percent.

But what does this value mean for India's economy and its ability to repay debts? According to the press release report, India’s external debt-to-GDP ratio was 19.4 percent as of September 2024. Meanwhile, India’s forex reserves reached $640+ billion in December 2024, sufficient to manage nearly 11 months of imports and about 90 percent of external debt.

These numbers tell us that while India's debt levels are fairly high, the economy remains stable, with strong foreign exchange reserves and a balanced external debt position. The steady economic growth and development in various sectors continue to attract investments and the ability to manage its debts effectively.

Factors influencing debt-to-GDP ratios

Economic growth: A growing economy naturally generates higher revenues, making it easier to manage debt. Slow growth generally increases the debt burden relative to GDP.
Tax policies: Changes in tax laws and strong tax collections can help lower debts, directly impacting the ratio.
Interest rates: Higher borrowing costs increase debt servicing expenses and make it harder to reduce outstanding debts.
Global events: Geopolitical tensions, regulatory changes, and crises like pandemics can often increase government expenses and debt levels.

Understanding thresholds and economic impact

Of course, just looking at the ratio isn’t enough—it’s the bigger picture that matters. The debt-to-GDP ratio must be analysed alongside other factors like economic growth, interest rates, and government policies.

A high ratio, usually above 75 percent, can be a warning sign. Some experts believe that economic growth may slow down when debt stays high for a long time, but it’s not always the case. For example, Japan has a debt-to-GDP ratio of nearly 250 percent and is one of the leading countries in tech advancements and quality of life. This is because citizens hold Japan’s government bonds, which results in low interest rates and strong investment opportunities.

Similarly, a low debt-to-GDP ratio (15 to 30 percent) doesn’t always mean a country is doing well. Nations like Saudi Arabia, Türkiye, and Russia maintain a low public debt but still face infrastructure, employment, and industrial growth challenges compared to the US, UK, India, and others.

The global economic impact of a high debt-to-GDP ratio

So, how does a high debt-to-GDP ratio impact the economy? Some challenges include:

Slower economic growth: Countries with a high debt burden often struggle to invest in essential sectors like infrastructure, healthcare, and education, which can slow down long-term growth.
Inflation risk: High capital borrowing can lead to inflation, especially if a country prints more money to cover its debt. This could eventually reduce the currency’s purchasing power and impact the overall economic growth.
Rising interest rates: High debt means higher interest costs, which reduces funds for public services and may push the government to raise taxes or cut expenses.
India's debt-to-GDP ratio is around 83 percent, reflecting its fiscal challenges, debt management, and balanced economic growth.