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The last few newsletters have highlighted US vulnerability to interest rate rises and/or a loss of lender and investor confidence. But what about some other leading economies?
This map was drawn by Eurostat. It shows countries with high levels of private sector debt relative to GDP, i.e. the stock of liabilities held by non-Financial corporations and households and non-profit institutions serving households (bonds and loans).
The darkest green means over 210% of GDP, the next darkest green means between 147% and 210%. Light green means 116% to 147%. The others are lower debt/GDP countries.
The obvious worry spots are Ireland and The Netherlands. In 2005 Ireland’s private debt/GDP was a “mere” 170%. This rocketed to 279% by 2012 as the country borrowed heavily to rescue its banks and its economy.
It seem now to be on the road to recovery, but that is a large debt burden to carry. It still has a lot of government debt as well, amounting to over 80% of GDP.
The Netherlands had a high debt level going into the financial crisis at 215% of GDP. It has coped well, keeping the rise limited – it is now 229%. Its government debt is 66% of GDP.
There has been a fall in UK household and corporate debt since the financial crisis from around 170% to 160%. Government debt is now high, at 87% of GDP.
Just to throw in one golden European country: the virtuous Germans…………..To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
