The World Is No Longer the Same: Advanced Economies Increasingly Burdened by Debt, Indonesia's Decreases
The World Is No Longer the Same: Advanced Economies Increasingly Burdened by Debt, Indonesia’s Decreases
Jakarta, CNBC Indonesia - Government debt conditions in various major countries around the world are beginning to move out of sync. Over the past two decades, some countries have seen their debt soar sharply, while others have successfully reduced their debt burden.
According to Visual Capitalist, based on data from the IMF World Economic Outlook October 2025 edition, the government debt-to-GDP ratio in several major economies shows significant changes between 2005 and 2025.
The debt-to-GDP ratio is the comparison between total government debt and a country’s economic output. Simply put, this ratio is used to assess how large the debt burden is compared to the country’s economic capacity.
Globally, the government debt ratio has risen from 68% of GDP in 2005 to 95% of GDP in 2025.
This means that, on average, the government debt burden worldwide is indeed increasing. However, conditions vary by country. Some countries have debt ratios far above 100% of GDP, while others have managed to maintain or even reduce their debt ratios.
Advanced Economies Hit Hardest
The largest debt increases have occurred in advanced economies. The government debt ratio in advanced countries has risen from 76% of GDP in 2005 to 110% of GDP in 2025.
Several major countries even have debt ratios above 100% of GDP. The United States records a debt ratio of 125% of GDP, France 117%, and the United Kingdom 103%.
Japan is the country with the highest debt ratio among the world’s major economies, reaching 230% of GDP.
The high debt in advanced economies is influenced by many factors, including large government spending, ongoing budget deficits, stimulus during crises, and increased spending needs due to a growing ageing population.
Emerging Economies Also Under Pressure
Debt increases have also occurred in emerging economies. The government debt ratio in emerging markets and developing economies has risen from 41% of GDP in 2005 to 73% of GDP in 2025.
China is one of the most striking examples. China’s government debt ratio has risen sharply from 26% of GDP in 2005 to 96% of GDP in 2025.
Brazil and South Africa have also recorded significant increases in their debt ratios over the same period.
This situation shows that debt pressure is not only experienced by advanced countries but is also starting to be felt in many emerging economies.
Not All Countries Experience Rising Debt Ratios
Although the global trend shows an increase, not all countries are experiencing the same.
Some countries have instead succeeded in reducing their debt-to-GDP ratios over the past two decades. Turkey is one of the most significant examples. Turkey’s government debt ratio fell from 50% of GDP in 2005 to 24% in 2025.
Saudi Arabia has also recorded a decline, from 37% of GDP in 2005 to 29% in 2025.
Indonesia is also among the countries whose debt ratio has decreased during this period. Indonesia’s government debt ratio is recorded to have fallen from 43% of GDP in 2005 to 41% in 2025.
This shows that the debt burden can still be controlled if the government is able to maintain the budget, control spending, strengthen state revenues, or boost economic growth.
In other words, the direction of government debt worldwide is now increasingly divided. Some countries are finding it heavier to bear their debt, while others have succeeded in making their burden more manageable.
Why Is This Important?
High debt can become a problem when borrowing costs also rise. The more expensive the interest on debt, the larger the funds the government must prepare just to pay the interest.
As a result, budgetary space for other needs could become narrower. Spending on infrastructure, public services, health, education, and defence could also be pressured.
For countries with high debt, this condition could pose a major challenge, especially when economic growth slows.
Conversely, countries that manage to keep debt under control will have more room to face crises, provide stimulus, or drive economic growth.
Therefore, this divergence in debt direction among countries will become increasingly important in the future. Amid high borrowing costs and an unstable global economy, a country’s ability to manage debt could determine how resilient they are in facing future economic pressures.