{"id":436,"date":"2020-03-10T08:21:00","date_gmt":"2020-03-10T08:21:00","guid":{"rendered":"http:\/\/13.56.60.212\/?p=436"},"modified":"2025-02-26T12:20:24","modified_gmt":"2025-02-26T18:20:24","slug":"the-worlds-household-debt-visualized","status":"publish","type":"post","link":"https:\/\/www.accrediteddebtrelief.com\/blog\/the-worlds-household-debt-visualized\/","title":{"rendered":"The World\u2019s Household Debt, Visualized"},"content":{"rendered":"\n

According to the New York Federal Reserve<\/a>, America\u2019s household debt is the highest it’s ever been (in nominal dollars), with the previous peak being in 2008. But why? Well, one possible reason is that the current era of low and negative interest rates is tempting many people to load up on mortgages, credit cards, auto loans and student loans. <\/p>\n\n\n\n\n\n\n\n

And it\u2019s not just in the U.S. that this trend is evident. Looking at household debt data from around the world, courtesy of the International Monetary Fund<\/a>, we can get a good picture of just how big this problem really is. <\/p>\n\n\n

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While the overall amount of Americans\u2019 debt is more than double of the next closest country (China), America\u2019s growing economy suggests Americans are still in a strong position to manage their debt load.  The biggest debt growth story comes from China; their expanding middle class has taken their household debt as a percentage of GDP (Gross Domestic Product) from 17.8% to 54.2% in the past 10 years. The growth has happened so rapidly that China\u2019s central bank is concerned about a debt crisis<\/a>, and is now looking for ways to safely manage household debt while continuing to grow their enormous consumer economy. <\/p>\n\n\n\n

China’s household debt levels might be concerning, but even more troublesome is that Norway, Canada, the Netherlands, Denmark, Australia and Switzerland all have household debt levels above 100% of GDP. Switzerland in particular must be cause for concern at 127%. With Swiss interest rates firmly in the negative<\/a>, the incentive to keep spending and borrowing could lead to a very unique debt crisis.    <\/p>\n\n\n\n

A crisis\nlooming?<\/h2>\n\n\n\n

What does all this mean for the overall economic health of these\ncountries? Gross Domestic Product (GDP) is the total market value of all the goods and services produced\nby a country in a specific year. It functions as a scorecard for a country\u2019s economic health. Comparing household debt to the nation\u2019s\nGDP lets us look at how much debt citizens are holding compared to the\ncountry\u2019s overall economic output, so we can see if any countries might be\nfacing a household debt crisis in the near future. <\/p>\n\n\n\n

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America\u2019s household debt today is 75.9% of GDP, which is down from 98.6%<\/a> back in 2007. Globally, household debt to GDP is just under 60%, and the overall amount of debt – $47.3 trillion – can be concerning. In an economic downturn, many people find their incomes dropping. As growing concern of a global debt crisis<\/a> creeps back into the mainstream, are we in a safer place today due to higher GDP, or is the danger greater due to higher outstanding balances? Only time will tell. <\/p>\n\n\n\n

Continental breakdown<\/h2>\n\n\n\n

This table shows how household debt is mostly concentrated to three regions \u2013 North America, Europe and Asia. These regions hold nearly 94% of the world\u2019s household debt whereas Africa, South America and Oceania combine to make up the remaining 6%. The Oceania region that includes Australia and New Zealand is the most heavily indebted region at 116.8% household debt to GDP.<\/p>\n\n\n\n

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Household debt by nation<\/h2>\n\n\n\n

The United States household debt is an astounding $15.6 trillion, which makes up nearly 33% of the world\u2019s total. Despite this astronomical figure, it\u2019s still just 75.9% of the country\u2019s GDP.  Of the 16 countries with a GDP of $1 trillion or more, four of them have household debt levels less than 20% – India, Russia, Mexico and Indonesia. This could be due to a cultural distaste for debt, an underdeveloped banking and credit system, or highly concentrated wealth within the country.<\/p>\n\n\n\n