I Invest In You: The 15 Countries That Are Buried Under The Most Debt

Tuesday, April 5, 2011

The 15 Countries That Are Buried Under The Most Debt

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Countries that ran wild with spending through the boom years are now seeing their debt problems come home to roost.

We've ranked the 15 states with the worst debt to GDP ratios, and added CDS prices (where available) to point out what the market thinks of their outlook.

Many of the expected names make the cut, like troubled European states Portugal and Ireland, while some surprising titans feature too.

#15 Portugal

Debt as percent of GDP: 83.2

5-Year CDS spread: 565.04

Debt outlook: Former PM Jose Socrates said Portugal's debt burden fits the EU norm. The country's public debt is expected to rise to 86.6% in 2011 and will only begin to decline in 2013, according to Bloomberg. In a bid to reduce its debt burden the country has put in place austerity measures and is raising its taxes, but it may still need an EU-IMF bailout.

Debt ratio provided by CIA. CDS pricing provided by CMA Datavision via Bloomberg.

#14 France

Debt as percent of GDP: 83.5

5-Year CDS spread: 73.81

Debt outlook: French public debt is expected to rise as high as 86.9% of GDP in 2011 according to a report by HSBC. The country has implemented spending cuts, increased certain taxes and is raising the retirement age but if Eurozone countries require more bailout funding France could be dragged further down.

Debt ratio provided by CIA. CDS pricing provided by CMA Datavision via Bloomberg.

#13 Sri Lanka

Debt as percent of GDP: 86.7

5-Year CDS spread: N/A

Debt outlook: The Sri Lankan government's debt mounted during civil war years especially in 2008 and 2009 as it pushed on in its war against the LTTE. The country needs to maintain its GDP growth, bring investors back to the country and implement tax reforms to cut its public debt burden.

Debt ratio provided by CIA. CDS pricing provided by CMA Datavision via Bloomberg.

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