"In recent years, there's been a great deal of coverage in the media of
the news media of the so called 'sovereign debt crisis'. Before the onset
of the current economic downturn, beginning in the final weeks of 2007,
many national governments in Europe and other parts of the world had
operated on quite dangerous ground: they were investing huge sums of money
in a myriad different projects while banking on the fact that the
atmosphere of financial well-being that existed at the time would continue
into the foreseeable future.
Of course, as we now know, economic turmoil was just around the corner.
When the markets became tougher and the financial resources became harder
and harder to come by, bubbles began to burst and government projects
quickly found themselves mired in uncertainty. Before long, those
governments had to resort to extensive deficit spending and thus the debt
began to mount.
In this infographic from IronFX.com, we examine the state of world debt.
We begin by looking at some of the ways in which governments have run into
trouble: the policies and activities that soon buried them under a
mountain of debt. The infographic then provides an overview of some of the
world's biggest and smallest debt burdens, and demonstrates the different
pictures we can get of the situation depending on just how we define
precisely what sovereign debt is.
At the same time, it emphasises the need
for subtlety in our discussions about debt: Should we just be worried
about external debts? How about if we take into account the moneys owed to
Finally, the infographic asks what world governments are doing to try and
bring their budgets back into order and considers the forecasts produced
by the IMF for the coming years."