Ireland now leads the Top-20 nations with the highest level of external debt expressed as a percentage of GDP and that status is unsustainable.
External debt is a measure of foreign liabilities and in this context includes outstanding and actual current liabilities (not contingent liabilities), including principal and interest, owing by Irish residents to non-residents.
External debt generally falls into four categories:
- Public and publicly guaranteed debt
- Private non-guaranteed credits
- Central Bank deposits
- Loans due to IMF (if there are any)
The Irish banking sector accounts for $976 billion of external debt and even if this figure was wholly discounted, Ireland would still have the highest debt to GDP ratio in the world – 746%.
External debt has much graver implications that government debt because it is a reflection of how much is borrowed to sustain current living standards.
Ireland’s GDP has been shrinking while our external debt has been rising.
| External debt % GDP | Gross External Debt $ Billion | GDP $ Billion | ||
| 1 | Ireland | 1,312% | 2,320 | 176.9 |
| 2 | United Kingdom | 425.9% | 9,130 | 2,140 |
| 3 | Switzerland | 382.2% | 1,210 | 317 |
| 4 | Netherlands | 376.6% | 2,460 | 654.9 |
| 5 | Belgium | 328.7% | 1,250 | 381 |
| 6 | Denmark | 316% | 627.6 | 198.6 |
| 7 | Sweden | 264.3% | 881.5 | 333.5 |
| 8 | Austria | 256.2% | 827.9 | 323.1 |
| 9 | France | 248% | 5,230 | 2,110 |
| 10 | Portugal | 235.9% | 548.45 | 232.4 |
| 11 | Hong Kong | 223.1% | 627.9 | 301.6 |
| 12 | Finland | 220.2 | 402.24 | 182.6 |
| 13 | Norway | 202.6 | 553.4 | 273.1 |
| 14 | Spain | 186.1 | 2,550 | 1,370 |
| 15 | Germany | 182.5% | 5,130 | 2,810 |
| 16 | Greece | 170.5% | 581.68 | 341 |
| 17 | Italy | 147.4% | 2,594 | 1,760 |
| 18 | Australia | 124.3% | 1,025 | 824.3 |
| 19 | Hungary | 121.9 | 225.56 | 184.9 |
| 20 | USA | 96.5% | 13,770 | 14,260 |
| Source: CNBC + World Bank |
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