Top 10 Largest Countries Debt to Surpass $64trn, US Drives Surge—Fitch
Government debt among 10 of the largest developed markets is set to continue rising sharply, exceeding USD64 trillion, which is 115% of GDP, by the end of 2025, Fitch Ratings says in a new quarterly Developed Market Sovereigns Debt Sustainability Monitor.
According to Fitch’s debt sustainability monitor, this marks a dramatic increase from USD 25 trillion, or 72% of GDP in 2007, with over two-thirds of the growth attributable to the US.
The recently enacted One Big Beautiful Bill Act will entrench high US budget deficits over the medium term. The law extends most 2017 tax cuts, increases state and local tax deductions, and exempts certain income from tax, partially offset by cuts to Medicaid and green subsidies.
However, Fitch does not expect this to materially alter its forecasts for the US government deficit, which are 7.1% of GDP in 2025 and 7.8% in 2026. For Europe, NATO’s higher defence spending targets could add to already significant fiscal pressures across member states. While unlikely to drive rating changes on its own, the commitment could compound existing credit risks where debt and deficits are elevated.
Fiscal pressures are also mounting in the UK, where the government has withdrawn planned social welfare savings. This reversal underlines the political difficulty of consolidation and leaves little room for manoeuvre within fiscal rules. Fitch forecasts the UK’s budget deficit at 5.2% of GDP this year.
“We expect government debt/GDP ratios to rise this year in Canada, France, Germany, Italy, the UK and the US, with Australia, Japan, Spain and Switzerland seeing declines”, Fitch said.
The combination of high debt, moderate economic growth, rising interest costs, and growing expenditures will continue to contribute to challenging debt dynamics for developed market sovereigns beyond the short term. #Top 10 Largest Countries Debt to Surpass $64trn, US Drives Surge—Fitch Reps Move to Prohibit Public Servants from Using Private Schools, Hospitals
