DINARRECAPS8 1/2/25 DINARRECAPS8 1/2/25

Iraq Economic News and Points to Ponder Thursday AM 1-2-25

The 10 Largest Arab Countries In Debt In 2024.. This Is Iraq’s Rank

Economy 2025-01-01 | Source: Al Jazeera Net 5,505 views Alsumaria News – Economy The International Monetary Fund expects the volume of public (government) debt to exceed $100 trillion during the year 2024, according to the World October Economic Outlook report issued last.

Looking ahead, debt levels are expected to rise faster than previously expected as government policies fail to address debt risks in an aging population and rising healthcare costs.

The 10 Largest Arab Countries In Debt In 2024.. This Is Iraq’s Rank

Looking ahead, debt levels are expected to rise faster than previously expected as government policies fail to address debt risks in an aging population and rising healthcare costs.

Rising geopolitical tensions may also lead to increased defense spending, adding pressure on budgets Government.

The International Monetary Fund has warned that the public debt situation around the world may be more serious than most people think, highlighting high fiscal deficits in the United States and China.

By the end of the current decade public debt to reach, the International Monetary Fund expects global GDP 100% of global by 2030, according to the International Monetary Fund.

America And China

*As the largest economy in the world, US debt continues to balloon, representing 34.6% of total global government debt with a debt volume of $36.1 trillion based on US Treasury data for December 12, 2024.

*China, which ranks second in the world, accounts for 16.1% of global government debt with a total debt volume of $16.4 trillion.

*The United States and China bear a large share of rising public debt levels.

Public Debt

*Excluding the two countries from the calculations, the ratio of global to GDP will decrease by about 20%, according to the International Monetary Fund.

*Egypt tops the list of the most indebted Arab countries with $345.5 billion, followed by Saudi Arabia with a total debt volume of $311.5 billion.

Why Do Governments And Countries Borrow?

in the world obtain Governments most of their income from taxes.

For example, residents pay many different taxes to the government such as income tax, sales tax and value added tax, and companies pay tax on the profits they make, and other taxes.

In theory, the state can cover all of its spending through taxes, and this sometimes happens, but if the government is unable to do that, it resorts to filling the gap by increasing taxes, reducing spending, or borrowing.

Higher taxes mean people have less money to spend, so companies make less profits, which can be bad for jobs and wages. Lower profits also mean companies will pay less in taxes.

Therefore, governments often decide to borrow to boost the economy, and they also borrow to finance major projects, such as new railways and roads, health care projects and others.

How Do Countries And Governments Borrow?

borrow Governments money in several ways, the most important of which are:

Selling Bonds

raise Governments money by selling bonds, often to investors.

An investor who buys a bond lends the government money for an agreed upon term, and many bonds pay interest at regular intervals known as "coupon payments."

When the bond's agreed-upon term expires - known as its maturity date - the government repays the principal amount of money with dividends.

Some bonds are short-term, some are medium-term, and some are long-term that may last for decades, according to the World Economic Forum.

Buying bonds or government debt is usually a safe investment, especially if you are lending to a rich and stable country like the United States, which is usually seen as less risky because it is the largest economy in the world and has never defaulted on its sovereign debt.

Resorting to the International Monetary Fund

also borrow Governments from the International Monetary Fund, which lends money to its member countries to help them overcome economic crises or to prevent crises.

The IMF only lends to governments, not the private sector or civil society.

The Fund's loans are not tied to any specific project or spending - unlike loans from development banks, which are often used to support specific projects - and

almost all IMF loans come with strict conditions tied to policy changes that governments must make in order to receive financing.

The movement of credit due to the International Monetary Fund from December 1, 2024 to the 24th of the same month amounted to about $112.5 billion.

Resorting To The World Bank

The World Bank Group lends money primarily to developing countries and private institutions undertaking specific projects.

Countries eligible for loans from the World Bank's International Development Association must have a per capita income of less than $1,085 and may not already be in arrears on their debts to the IMF or the World Bank.

Upper middle-income countries (with per capita income between $4,046 and $12,535) can borrow from the International Bank for Reconstruction and Development at interest rates lower than those offered by commercial banks.

Lower middle-income countries (with per capita income between $1,036 and $4,045) can borrow from a “mix” of IDA and International Bank for Reconstruction and Development (IBRD) financing, depending on their creditworthiness.

Internal Loans

As for internal debt, it refers to the portion of a state’s debt owed within its borders, and

many of the world’s governments borrow from national and local banks operating in their territories, and from other institutions such as the Social Security Corporation, and other local investment institutions.

The Seriousness Of Debt And Its Effects

Borrowing may be vital for development, as governments use it to finance their expenditures, protect their people and invest in them, but it may also constitute a heavy burden when public debt grows excessively or very quickly, and this is what is happening today in various parts of the world, especially in developing countries.

The most important of these risks to developing countries, according to the United Nations Trade and Development Organization (UNCTAD), are the following:

1- High Cost Of External Debt

Developing countries now face increasing and rising costs of external debt.

External public debt service reached $365 billion in 2022, equivalent to 6.3% of export earnings.

By comparison, the 1953 London Agreement on German war debts set the amount of export earnings that could Spending it on servicing external debt by 5% to avoid undermining the recovery.

2- High Borrowing Costs

suffer Developing countries from higher borrowing costs than others, which increases the resources needed to pay creditors, making it difficult for developing countries to finance investments and development programs.

Developing countries borrow at interest rates that are about 2 to 4 times higher than interest rates in the United States, and about 6 to 12 times higher than interest rates in Germany.

3- Depletion Of Resources

Developing countries have experienced net resource outflows.

In 2022, developing countries paid $49 billion more to their external creditors than they received in new payments, resulting in a negative net resource transfer.

The impact of these trends is a major development concern, because it is people who ultimately pay the price.

4- Health, Education And Development

Not only are interest payments in developing countries growing rapidly, they are outpacing growth in critical public spending such as health, education and development programmes, and as a result, interest payments are constraining spending in all developing countries.

Overall, a total of 3.3 billion people live in countries that spend more on interest payments than on education or health.

The 10 Highest Debt Countries In The World In 2024

We present to you a list of the 10 largest debt countries in the world in 2024, according to Visual Capitalist, based on data from the World Economic Outlook report issued by the International Monetary Fund in October 2024 , and data from the US Treasury Department regarding US debt.

1- United States Total debt: $36.1 trillion

Percentage of global debt: 34.6%

Ratio to GDP: 121%

2- China Total debt: $16.5 trillion

Percentage of global debt: 16.1%

Ratio to GDP: 90.1%

3- Japan Total debt: $10.2 trillion

Percentage of global debt: 10%

Ratio to GDP: 251.2%

4- United Kingdom Total debt: $3.7 trillion

Percentage of global debt: 3.6%

Ratio to GDP: 101.8%

5- France Total debt: $3.6 trillion

Percentage of global debt: 3.5%

Ratio to GDP: 112.3%

6- Italy Total debt: $3.3 trillion

Percentage of global debt: 3.2%

Ratio to GDP: 136.9%

7- India Total debt: $3.2 trillion

Percentage of global debt: 3.2%

Ratio to GDP: 83.1%

8- Germany Total debt: $2.95 trillion

Percentage of global debt: 2.9%

Ratio to GDP: 62.7%

9- Canada Total debt: $2.35 trillion

Percentage of global debt: 2.3%

Ratio to GDP: 106.1%

10- Brazil Total debt: $1.9 trillion

Percentage of global debt: 1.9%

Ratio to GDP: 87.6%

As we note from the previous table, the largest debtor countries are also the largest economies in the world, and this means that the global economy itself is in danger.

10 Arab Countries With The Highest Debt In 2024

Below is a list of the 10 largest Arab countries in debt in 2024, according to previous sources.

1- Egypt Total debt: $345.5 billion

Percentage of global debt: 0.3%

Ratio to GDP: 90.9%

2- Saudi Arabia Total debt: $311.5 billion

Percentage of global debt: 0.3%

Ratio to GDP: 28.3%

3- UAE Total debt: $171.1 billion

Percentage of global debt: 0.2%

Ratio to GDP: 31.4%

4- Iraq Total debt: $121.2 billion