Are you feeling the squeeze at the moment? You're not alone. With inflation and interest rates at increased levels in many parts of the world, household debt – which includes everything from mortgages to credit card liabilities – is hitting record highs.
As billions of people around the globe grapple with steeper repayments and heftier expenses, read on to find out the average household debt per working-age person (15-64 years) in 26 selected nations, based on data from CEIC, World Bank, and national central banks. We've also included figures revealing collective household debt as a percentage of each nation's GDP, a strong indicator of how deep a country's debt problem runs. All dollar amounts in US dollars.
Household debt in the Philippines represents just 10.1% of the country's GDP, which is super-low by global standards. While this light debt burden has been dubbed a "miracle" by some, it's actually more to do with financial exclusion than anything else.
Poverty is widespread in the Philippines, and buying property is out of reach for many who live there, meaning home ownership and mortgages are comparatively uncommon.
What's more, an estimated 40% of adult Filipinos don't have a bank account and credit is hard to come by, with unregulated loan shark lending prevalent.
Indonesia's household debt as a percentage of GDP is even lower, at 9.3%. Again, this can be partly explained by the developing country's shockingly low levels of financial inclusion.
According to the World Economic Forum, Indonesia has the world's third-largest unbanked population and a low financial literacy index of around 40%.
But it's not all bad. The nation also boasts the ninth-highest savings-to-GDP ratio in the world, another key factor that helps keep household debt levels low.
Like many other developing countries, Mexico also has very low household debt, representing just 16.2% of the nation's GDP.
Once again, this is primarily because financial inclusion is so limited. Just 20% of Mexicans have access to credit, and a mere 10% are believed to possess a credit card.
On the upside, economies in nations with modest household debt are less likely to be vulnerable when interest rates rise.
Household debt in Russia has reached record highs of late, hitting $352.8 billion (£288bn) last July. With the country's economy faltering as a result of President Putin's invasion of Ukraine, interest rates were hiked to 16% last December, spelling financial pain for many.
However, household debt is still low (as of June 2023, the latest month for which reliable data is available, it accounted for 20.2% of GDP). This is partly because the number of Russians who have a mortgage is relatively small, while saving rates are moderately high.
Brazil's household debt sits at a reasonable level compared to many other countries, representing 25.9% of its GDP.
This is primarily due to low levels of mortgage uptake, with a recent study by a São Paulo business school revealing the nation's consumer credit – including credit cards, personal loans, and auto loans – is actually excessive in relation to the size of the economy.
With savings rates low and around 40% of adults in default on their debts, it's looking increasingly unsustainable, too.
At 63.3% of GDP, China's household debt is fast approaching the red line of 65% the International Monetary Fund (IMF) has identified as a warning sign of financial instability.
Much of this debt is made up of mortgage loans and with the housing market tanking, consumer spending is falling back as house prices flounder and homeowners opt to save instead of spend.
Compounding the problem is an explosion of easy credit that's saddled many with heavy non-mortgage debt.
Spain is a textbook example of how excessive household debt can affect an economy when interest rates spike.
During the early part of the 2008 to 2014 financial crisis, Spain's household debt-to-GDP ratio peaked at 90%, spelling massive economic trauma.
Fast-forward to 2023 and the figure was a far less alarming 54.6%. The lower debt levels have made the economy more resilient in the face of recent interest rate hikes, leaving fewer people struggling with larger repayments.
At 72.5%, neighbouring Portugal's household debt-to-GDP ratio is significantly higher. Ever-rising interest rates are proving especially troublesome as the vast majority of the country's mortgages – around 90% – are variable, and pegged to one of the highest rates in the eurozone.
For this reason, the Portuguese government has ordered banks to discount the benchmark Euro Interbank Offered Rate (Euribor) interest rate by 30% to support stretched homeowners and help avoid mass defaults.
Italy's household debt as a percentage of the country's GDP peaked at 58.5% during the height of the COVID-19 pandemic in December 2020, and has since fallen slightly to 52.3%.
According to a report published by the Financial Times: "Italian households do not live beyond their means. Italy’s households have one of the lowest debt-to-GDP ratios among all advanced economies, well below that of the UK and even lower [than that of Germany]."
Household debt is on the rise in Japan. Consumer debt in particular reached record levels in 2023, partly due to a boom in digital lending.
As a consequence, the country's household debt-to-GDP ratio has crept up to 67.2%. However, this is still not as high as its 78.7% peak in 2000, which followed the country's financial downturn in the 1990s (also referred to as "the Lost Decade").
Household debt in Austria is modest compared to many other EU nations, coming in at 47.4% of GDP.
Renting is hugely popular in the country, which has the third-lowest rate of home ownership in Europe – and of course, a lower number of mortgages makes for a lower rate of debt overall.
Interestingly, almost 7% of mortgages in Austria are denominated in Swiss francs rather than euros, with the trend for Swiss franc mortgages originally emerging thanks to low interest rates before the 2008 financial crisis. This later backfired for many homeowners when the Swiss franc started to appreciate against the euro.
Likewise, Germany is a nation of renters thanks to a heavily subsidised rental market and other factors such as strong tenant rights and security of tenure.
The country has the second lowest level of home ownership in Europe and the relatively low number of mortgages helps keep German household debt at a manageable 54.3% of GDP.
Ireland's economy is outclassing its EU counterparts. Data from Mastercard suggests the country's strong performance is mainly due to its very low household debt, which is just 27.9% of the nation's GDP.
Bolstering this are Ireland's high savings rates, with money accumulated during the pandemic helping to keep personal debt down and consumer spending healthy.
South Korea also offers its citizens decent savings rates, although its household debt has gone through the roof. Household debt accounted for a bloated 104.9% of GDP in the second quarter of 2023.
This figure is well beyond the warning threshold of 65% and the 80% line – which, if exceeded, can hamper GDP growth, according to the Bank for International Settlements.
A surge in mortgages and loans is behind the skyrocketing debt. The authorities have responded by tightening regulations, although this appears to have had little effect on the frenzy of borrowing in the country.
Belgium's household debt-to-GDP ratio has been steadily decreasing from its pandemic peak of 68% in March 2021. It now stands at 60.8%, undoubtedly to the relief of the country's central bank, as the ratio has dropped back below that 65% danger threshold.
Belgians are particularly asset-rich and Credit Suisse has ranked Belgium as the global number one for median adult wealth, which implies the affluent denizens of the country should comfortably be able to pay their dues.
Unlike the inhabitants of various other countries, the French population failed to deleverage (reduce debt levels) during the 2010s, even though interest rates were low.
While the nation's household debt-to-GDP ratio peaked at 77.3% in December 2020, it still remains stubbornly high at 74.8%, a growing cause for concern given the rise in interest rates.
Despite paying minimal taxes, households in the United Arab Emirates actually owe more than the country's GDP, with the ratio of household debt-to-GDP a hefty 106.2%.
Savings rates are lower than they should be and overspending is a problem in the nation. The most recent official quality of life survey conducted by the UAE government found that 53% of citizens don't have a clear financial plan, while almost half of families in Abu Dhabi have outstanding loans to settle.
At 74.9%, Finland's household debt-to-GDP ratio is high. The country's central bank has been voicing concerns about growing household debt for years, and those fears have been realised now that interest rates are soaring in tandem with grocery and energy prices.
With more than 90% of mortgages in Finland on a variable rate, homeowners in the nation are feeling the pinch. This is dulling consumer spending and the country has recently sunk into a recession.
Total household debt in the UK surpassed the $2.4 trillion (£2tn) mark for the first time last year, with elevated inflation and higher interest rates prompting many Brits to borrow more.
Saving rates in the country are low by international standards, and while the nation's household debt-to-GDP ratio decreased throughout 2023, it remains firmly in the danger zone at 84.7%.
At over $17 trillion (£13.4tn), total US household debt is the highest in the world, with credit card debt surpassing one trillion dollars for the first time last year.
Americans are borrowing more than ever in response to high inflation and interest rates, although a recent WalletHub study found that, in real terms, households were actually worse off during the 2008 financial crisis.
In spite of the increased borrowing, the nation's household debt-to-GDP ratio decreased in 2023 to 64.1%, just below the danger threshold.
The Canadian economy is either on the brink of recession or already in one, according to insights from firms such as Desjardins and Oxford Economics.
One of the chief reasons is the country's excessive level of household debt, especially mortgage debt, which has become harder to sustain amid higher interest rates. Canadians owe more than the country produces – the household debt-to-GDP ratio stands at 102% – so it's unlikely the nationwide issue will be fixed anytime soon.
Household debt as a percentage of GDP is on a downward trajectory in the Netherlands, though it still remains high at 94.3%.
Mortgage debt is particularly onerous, with more than 60% of the Dutch population having a property loan. This is the highest proportion in Europe, leaving the country's economy more at risk from higher interest rates.
The good news is that people in the Netherlands have more assets after debts are deducted than any other OECD country (bar Belgium), so tackling debt isn't an issue for many citizens.
Denmark's household debt-to-GDP ratio has also been steadily dropping but remains high by European standards at 86.8%.
Fortunately, much like the Dutch and Belgians, the Danes are asset-rich. When you factor in the country's high savings rates and robust capital buffers, the impact of higher interest rates on most of its citizens is low, according to American credit rating agency Fitch Ratings.
At 116.6% of GDP, Australia's vast level of household debt has been described by AMP Capital's Shane Oliver as the nation's "Achilles heel". And the country's current interest rate of 4.35% is not helping matters...
Aussies have been stung by higher mortgage repayments, while the cost of living crisis has prompted millions to raid their savings, rack up credit card debt, and take out personal loans. It's hardly surprising that the Land Down Under is navigating a per capita recession as a result.
Norway's household debt as a percentage of GDP is high at 85.1%. But the nation's mortgage holders and other debtors are better positioned to cope with higher interest rates and inflation than those in many other countries, with its saving rate officially the highest in the world.
Still, elevated interest rates and inflated prices are proving to be a drag on the economy as Norwegians tighten their belts in response.
Not only does Switzerland have the highest household debt per working-age person in our round-up, its household debt-to-GDP ratio is also the largest at 128.4%.
On a more optimistic note, the country also has the highest wealth per capita, which helps keep the debt sustainable. But the cracks are beginning to show...
As reported by SwissInfo, poverty is on the rise in the moneyed nation, with rental costs a key driver of debt. Switzerland has low home ownership but rent is linked to interest rates, so last year's hikes have hurt tenants as much as mortgage holders.
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