External debt refers to the amount of money that a country owes to foreign creditors, including governments, institutions, and individuals. It is an important economic indicator that reflects a country’s borrowing from abroad to finance its activities and investments.
Let’s analyze the data for some selected G-20 countries:
- Argentina: Argentina’s external debt increased from 271,776 USD million to 276,694 USD million, representing a difference of 4,918 USD million or a 1.81% increase.
- Australia: Australia’s external debt rose from 2,211.18 AUD million to 2,243.59 AUD million, indicating an increase of 32,409 AUD million or a 1.47% rise.
- Brazil: Brazil’s external debt grew from 676,312 USD million to 689,872 USD million, showing an increase of 13,560 USD million or a 2.00% rise.
- Canada: Canada’s external debt increased significantly from 3,441.08 CAD million to 3,579.70 CAD million, representing a difference of 138,615 CAD million or a 4.03% increase.
- China: China’s external debt decreased from 27,466 USD million to 24,528 USD million, indicating a reduction of 2,938 USD million or a 10.70% decrease.
- Euro Area: The Euro Area’s external debt declined from 16,582.8 EUR million to 15,755.2 EUR million, showing a decrease of 827,622 EUR million or a 4.99% decrease.
- India: India’s external debt increased from 605,739 USD million to 613,059 USD million, indicating a rise of 7,320 USD million or a 1.21% increase.
- Japan: Japan’s external debt grew from 566,525 JPY billion to 603,088 JPY billion, representing an increase of 36,563 JPY billion or a 6.45% rise.
- United States: The United States’ external debt increased from 24,350.9 USD million to 24,544.4 USD million, indicating a rise of 193,480 USD million or a 0.79% increase.
These figures provide insights into the changes in external debt for the selected G-20 countries. It is important to note that external debt levels and their changes can have various implications for a country’s economy, including its ability to manage debt obligations, attract foreign investments, and maintain macroeconomic stability.
The decrease in external debt was driven by a number of factors, including:
- Increased repayments by governments: Governments in many G-20 countries repaid their debts in order to reduce their borrowing costs.
- Increased sales of assets by corporations: Corporations in many G-20 countries sold assets in order to reduce their borrowing.
- Increased savings by households: Households in many G-20 countries saved more money in order to reduce their borrowing.
The decrease in external debt is a positive development, as it could lead to a number of benefits, including:
- Reduced risk of debt crises: If interest rates rise or economic growth slows, G-20 countries that have borrowed heavily will be less likely to face difficulty repaying their debts. This could help to prevent a debt crisis, which could have a negative impact on the global economy.
- Increased economic growth: The reduced debt burden could lead to increased investment and consumption, which could boost economic growth.
- Reduced inflation: The reduced debt burden could lead to reduced inflation, as governments and corporations will not need to print as much money to repay their debts.
Source: https://tradingeconomics.com/country-list/external-debt?continent=g20
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