A recent analysis of global debt burdens by the Bank for International Settlements (BIS) for Q4 2025 highlights a complex picture of national borrowing. Covering 43 major economies, the data shows that while some countries carry significant overall debt, the composition—whether it's government, household, or corporate debt—varies dramatically and carries different economic implications.
Overall Debt Landscape
Luxembourg recorded the highest combined debt-to-GDP ratio in the dataset at 446.4%, followed by Hong Kong at 406.5% and Japan at 369.5%. However, the underlying drivers for these high figures differ significantly:
- Luxembourg: Corporate debt dominates, standing at 358.8% of GDP. Household debt was 61.2% and government debt 26.4%.
- Hong Kong: Corporate debt also leads at 240.7%, alongside household debt of 87.8% and government debt of 78.0%.
- Japan: Government debt is the primary factor, reaching 194.5% of GDP, with corporate debt at 113.9% and household debt at 61.1%.
Other nations with high total debt include Singapore (337.4%), France (331.5%), and Canada (319.1%), where debt is more evenly distributed across sectors.
Government Debt Spotlight
Government debt is notably high across Southern Europe and East Asia. Japan leads this category with 194.5% of GDP. Other significant figures include Greece (146.5%), Italy (137.1%), France (116.0%), and Singapore (166.2%).
It's crucial to contextualize some government debt figures. For example, Singapore's high government debt is largely due to its issuance of Government Securities, which by law cannot be spent on the budget. These are often invested by the national pension fund, resulting in the state holding more assets than debt and maintaining a AAA credit rating.
Household Debt Hotspots
Household debt tends to concentrate in affluent economies characterized by expensive housing markets and robust mortgage systems. Switzerland tops the household debt ranking at 123.0% of GDP, followed by Australia (114.0%) and Canada (100.6%).
Switzerland's high household debt is particularly noteworthy given its low homeownership rates. Historically, Swiss tax laws incentivized homeowners to maintain mortgages rather than paying them down. This system was abolished by voters in September 2025, with changes expected to take effect no earlier than 2028.
Among G7 nations, Canada had the highest household debt ratio at 100.6%, significantly higher than the UK (73.6%) and the US (68.1%). The US figure has decreased substantially from 98.4% at the end of 2007.
Corporate Debt Concentrations
Corporate borrowing is particularly elevated in Northern European economies and those that serve as hubs for multinational financing structures. Luxembourg leads this category with an astonishing 358.8% of GDP, followed by Hong Kong (240.7%) and the Netherlands (166.3%).
These high corporate debt-to-GDP ratios, especially in Luxembourg, Hong Kong, and the Netherlands, often reflect their roles as major locations for multinational holding companies and corporate treasury operations. Intragroup loans booked through these entities can significantly inflate corporate debt figures relative to the host economy's GDP.
China also recorded substantial corporate debt at 142.8% of GDP, largely influenced by borrowing from state-owned enterprises and property developers, along with its expanding bond market.
Understanding the Nuances of Debt
The BIS data underscores that a high overall debt ratio doesn't tell the complete story. Japan's burden is largely governmental, Switzerland's is household-driven, and Luxembourg's is overwhelmingly corporate. This distinction is crucial, as government, household, and corporate debt carry different risks and implications for an economy's stability and future growth.