Japan unexpectedly is ranked first among the countries with the largest public debt. Scary stories about the US public debt, which is on everyone’s lips, turned out to be a plot for an adventure movie compared to Japan's thriller.
Japan holds the honorable first place in the list of the largest debtors with a huge gap. The 234% debt-to-GDP ratio looks really impressive. For example, the US ratio indicates 160%, the UK’s – 144%, and the top four is the EU with 120.4%. Average public debt worldwide reached 105% of GDP.
The coronavirus pandemic has become the main catalyst for debt growth, particularly, extensive measures to support the economy, which led to a surge in inflation in a number of countries. For example, the US CPI spiked by 5.4% hitting the highest level in 13 years. It is possible that in such an environment the Fed will tighten its monetary policy, which could worsen the debt servicing. But a number of major countries, even with such a debt load, will hardly face problems with its servicing in the near future.
