A budget surplus or a budget deficit is used to record the difference between national government revenues and expenditures. The results are typically presented as a percentage of the Gross Domestic Product (GDP). In order to indicate whether the balance is a surplus or a deficit, positive (+) numbers are shown in the cases of surpluses, while negative (-) numbers are shown to represent a budget deficit. Regarding the overall financial health of a nation, states with budget deficits are characterized as having expenditures that exceed their revenues. When this happens, countries will often find themselves in vital need of financial reform. When referring to accumulated federal government deficits, we normally speak of a "national debt." Countries with the biggest deficit relative to GDP will experience quite a number of complications as far as their ability to optimize economic growth.
The Most Indebted Countries
The country currently claiming the highest national deficit relative to GDP is Libya, with a deficit equivalent to 38.7% of its GDP. Falling behind Libya as world leaders in national debts relative to GDP, we find Timor-Leste (34.2%), Venezuela (32.3%), Eritrea (12.8%), and South Sudan (12.7%). As is plain to see from our list, the Middle East and Africa are especially well-represented. This is likely due to the convergence of developing economic infrastructures and frequent civil conflicts in these areas creating “perfect storms” financially for many of the nations therein.
Archetypal Examples of the Causes of High National Debt
Too help understand common causes leading to massive deficits, we take especially in-depth looks at two of the nations experiencing markedly high relative national deficits: Syria and Egypt. These two countries serve as excellent case studies, as they show two very different environments that are each conducive to the end result of large national deficits.
Civil Conflict in Syria
Syria has been experiencing a domestic crisis for a number of years, and it has taken its toll in this Middle Eastern country. In the wake of the ongoing civil conflicts there, many measures have been taken in an attempt to reconcile the country's state of insecurity. The lack of funding for the country as a whole, due to disrupted trade and a decreased capacity for taxation, and the constant threat of terrorism have been the primary factors contributing to the budget deficit that Syria is experiencing.
Unfortunately, the civil war and rogue terrorism attacks have led to many citizens seeking shelter beyond Syria’s borders. Among those seeking refugee are many leading businesspeople. Capital and funding for the country as a whole have been drastically reduced, and continues to be endangered further still. Even as Syrian leaders continue to make many promises for the future, the population continues to disperse to other parts of the world in search of safety and shelter. The main factors contributing to this chains of events are resultant from the war, a lack of stable infrastructure, and domestic and foreign investment from which to secure funds for the betterment of the country.
Egypt's Energy Crisis
Also in the Middle Eastern world, we find the nation of Egypt suffering from crippling debts. While not actively involved as a primary party in a major war like Syria, Egypt has unique debt problems of its own, largely resulting from imbalanced spending within the government sector. Unlike many of their neighbors and partners who dominate the world energy market, Egypt is actually experiencing an energy crisis, and it has been difficult for them to produce the power that is needed to keep their economy humming. Nonetheless, Egyptians have hopes for improvement in their future, wherein they will negotiate increased funding for domestic development and enhance their cultural influence on the world stage. In order to show that they can recompense their financiers, they are making repayment plans a key focus on their larger strategy to set out on the road to recovery.
Common Needs Among Global Debt Leaders
Countries with the biggest deficits as part of GDP face immense struggles and challenges as they attempt to rebuild from the losses that they have experienced. When a war breaks out, it can prove to be even more of a challenge. As the Syrian people leave their country in hopes of finding safer places to live, the labor force will be diminished. The difficult task of formulating a plan that will work is needed here and, at times, it is not always easy to determine the best route. With Egypt, the government is attempting to repair their energy crisis for the improvement of their country. In these cases and many other countries making our list, governments are tirelessly troubleshooting ways to effectively overcome massive debt while also growing their economies.
Budget Deficit By Country As Percentage Of GDP
- View information as a:
|Rank||Country||Deficit (as % of GDP)|
|5||South Sudan||-12.70 %|
|11||Gambia, The||-9.90 %|
|16||Papua New Guinea||-7.90 %|
|17||Congo, Republic of the||-7.70 %|
|18||Cabo Verde||-7.60 %|
|24||Equatorial Guinea||-6.80 %|