10 Great Countries without Public Debt - Clear Finances (2024)

Most Western countries have grown accustomed to issuing debt to finance their operations. But that is not a requirement. We will analyze 10 great countries without any significant public debt.


  • Introduction
  1. Switzerland
  2. Sweden
  3. Norway
  4. Denmark
  5. Czech Republic
  6. Estonia
  7. Singapore
  8. Taiwan
  9. South Korea
  10. Russia


Public debt is one of the great problems of our era. The existing debt load is unprecedented. And what is worse, it has been accumulated to finance short-term spending. We have nothing to show for it.

In the past, the only reason a country took on a significant amount of debt was because an exogenous event taking place, such as a world war. And the will to defend their county made governments willing to spend recklessly.

However, the debt governments have taken on in recent decades have mostly been used to finance frivolous spending. In other words, instead of living within our means, we have opted to continually go into debt, not worrying about how that debt would be paid back in the future.

The population has shown a high degree of ignorance and selfishness. And politicians have taken advantage of that, making promises to the public with the only goal of being elected to office.

The result is that virtually all the world’s major economies are in a very vulnerable situation. Many officials try to justify it with the argument that high public debt is the price for having a developed economy. But that could not be further from the truth.

Rich countries are not rich because they owe a lot of money. Debt only helps in the short term. In the long term however, debt creates many problem. The reality is that rich countries are rich despite their high public debt.

With that in mind, we wanted to highlight 10 prosperous countries with hardly any public debt. It will help make the point that a country can both be rich and have its public finances in order.

Additionally, all these countries are very different from each other. They are of different sizes, on different continents, different levels of economic development and standard of living, and very different economic models.

But they all share one thing in common: enough fiscal discipline to keep the country’s public finances healthy.

When we speak about the public debt levels of each of these countries, we will refer to the data published by the International Monetary Fund, as of the end of 2020.

1) Switzerland

It is no surprise to see Switzerland on this list. Switzerland is a country that, in practically all economic and social metrics, is an example to follow.

With a population of almost 9 million people, Switzerland has no natural resources of its own, no access to the sea, and virtually no public debt. What it does have is good governance, rule of law, stability, and a focus on the long term.

With public debt standing at 42% of GDP, the Central European country is surrounded by some of the world’s biggest debtors, such as Italy and France.

If you wonder what the secrets of the Swiss economy are, you can check out the following analysis:
Top 10 Reasons why Switzerland is so Rich

Let us now look at Northern Europe to find more fiscally responsible countries.

2) Sweden

With a public debt equivalent to 37% of its gross domestic product and a population of 10.5 million, Sweden is one of the wealthiest countries in Europe.

Sweden does not have any meaningful natural resources, so it owes its prosperity to the economic and industrial development of the country.

The Scandinavian country is one of the most interesting cases. This is because Sweden has a gigantic welfare state and very generous social policies. Indeed, many politicians in highly indebted countries refuse to even consider balancing the budget on the grounds that Sweden is a country with high public spending and a large welfare state.

However, these same politicians fail to realize that Sweden can afford such a welfare state, unlike countries like Spain, France, Argentina or Italy.

Consequently, if they wanted a generous and sustainable welfare state, they would prioritize economic development and balanced budgets.

3) Norway

To the west of Sweden is Norway, another Scandinavian country with healthy public finances. In the case of Norway, public debt stands at 41% of GDP. It should also be noted that Norway’s GDP per capita is one of the highest in the world.

Norway, in addition to being a very prosperous country, also has huge amounts of natural resources. Its oil and natural gas reserves represent a very substantial source of income for the state.

But it is important to recognize that the revenues from the extraction of fossil fuels are not used to finance current expenditures, but used to fund the country’s sovereign wealth fund. The goal is to guarantee the prosperity of its citizens in the future once those reserves have been exhausted.

In fact, the Norwegian sovereign wealth fund is larger than the existing level of public debt. As a result, Norway has de facto no net debt.

As a mental exercise, it is interesting to think about what the governments of Southern European countries would do if they had multibillion-dollar revenues from the exploitation of oil fields. My guess is that instead of saving and investing that money for the long term, they would use it as collateral to borrow money today and spend it straight away.

4) Denmark

A have a third Scandinavian country on the list, Denmark, with public debt equivalent to 42% of its GDP, a very high level of economic development, a very generous welfare state, and very few natural resources.

It is interesting how Germany is often mentioned as an example other countries should follow. However, Denmark is much more prosperous and economically freer than Germany. And its public finances a lot healthier. The main difference between Denmark and Germany is that Danish politicians do not contemplate

5) Czech Republic

So far, we have only talked about very prosperous countries. But having healthy public finances is not a matter of how wealthy a country is, but which priorities it has. Consequently, it is possible to grow an economy without going massively into debt.

In fact, real economic growth and healthy public finances go together. Economic development should be the result of society producing more goods and services, thereby improving the standard of living for the population.

An increase in public spending cannot sustainably improve performance of an economy or raise the standard of living of its citizens.

Thus, the Czech Republic is one of the greatest economic successes of the last three decades. Since the end of communism, the Central European country has been able to grow to such an extent that it has already overtaken Spain and Italy in real GDP er capita.

And all this has been achieved without taking on any meaningful public debt. Czech government debt stands at 38% of GDP.

For more information on the Czech economic miracle, check out this analysis:
Economy of the Czech Republic: 5 Lessons to Learn

6) Estonia

The Baltic countries are another example of great economic development without falling into the temptation of taking on loads of debt. Of the three Baltic countries, we will focus on Estonia, with public debt equivalent to 18% of its GDP.

In fact, Estonia is not only a successful country without hardly any debt, but also one of the wealthiest. Additionally, its long-term growth trajectory remains very strong.

With just under a million and a half inhabitants, and no natural resources, Estonia was part of the Soviet Union until 1991. Less than three decades later, its economy is already richer than that of many Western countries, including Spain and Italy.

7) Singapore

Singapore is one of Asia’s major financial centers. It is also one of the most prosperous countries on the planet. And all this has been achieved without taking on any meaningful public debt.

In fact, very much like Norway, Singapore has more assets than debt. Which means that de facto the Singaporean government has no net debt. And what is more impressive, without the vast natural resources Singapore has.

This is a privileged situation to be in, but Singaporeans have earned that privilege. Singapore is a small territory that was part of Malaysia until 1965.

In less than half a century, Singapore was able to go from being a third-world country to one of the most prosperous places in the world. Hard work and a focus on the long term were the two key ingredients in Singapore’s success.

8) Taiwan

With public debt below 33% of its GDP and a very complicated geopolitical situation, Taiwan, with its 24 million inhabitants, is another example of a country prospering thanks to doing things right.

Its economic development is already higher than that of most Western superpowers, despite the fact that Taiwan was known for its cheap labor up until just a few decades ago.

Taiwan is nowadays one of the world’s leading countries when it comes to manufacturing semiconductors and other electronic equipment, so the global economy depends on things continuing to go well in this part of the world.

9) South Korea

So far, we have only spoken of relatively small countries, but this is different in the case of South Korea and its 52 million inhabitants.

Like other countries in Asia, South Korea has no natural resources of its own. It also started from a very difficult place. In fact, barely half a century ago, its economic development resembled that of a third-world country.

South Korea has rapidly become an advanced industrialized economy. And their public finances have remained healthy throughout this time. Despite the difficulties experienced throughout 2020, public debt closed 2020 at only 48% of GDP.

To put it in perspective, none of the major eurozone countries has so little debt. And that includes both Germany and the Netherlands.

10) Russia

Finally, we conclude our list of prosperous countries without hardly any public debt with Russia. Russia is much different than the other 9 countries though.

In this case, we are talking about the largest country in the world, with its almost 150 million inhabitants, a medium level of economic development, and plenty of internal problems.

Despite all this, and the criticisms that can be made, Russia has grown a lot in the first two decades of the 21st century. The living conditions of most of the population have improved significantly, even though they remain well below those of Western countries.

What is more relevant for this analysis is that high economic growth has been achieved without making use of public debt, which stands at 19% of GDP.

Thanks to Russia’s high level of foreign exchange and gold reserves, like Norway and Singapore, the country has more assets than debt, which means it has no net debt.

To understand how Russia got there, we need to remember two important historical events.

On the one hand, the decade of the 1990s was terrible for Russia, culminating in the bankruptcy of the country in 1998. Its reputation on the international stage was heavily damaged.

On the other hand, over the past two decades, officials in Russia have realized that an emerging country cannot be sovereign if it owes a lot of money to foreign creditors. And sovereignty is crucial for Russians.

As a result, Russia has prioritized the stability of its public finances, paying off debt and increasing their reserves. In other words, it has done what was necessary to avoid a situation like the one experienced in 1998.

If you liked this analysis of countries without hardly any public debt, I welcome you to subscribe to my newsletter:
Clear Finances

And if you would like how other countries work from a tax perspective, check out this section:

10 Great Countries without Public Debt - Clear Finances (2024)


10 Great Countries without Public Debt - Clear Finances? ›

Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP.

What country is #1 in debt? ›

Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP.

What is the top 10 countries national debt? ›

  • China, People's Republic of. 77.1.
  • France. 111.67.
  • Germany. 66.54.
  • Italy. 144.41.
  • Japan. 261.29.
  • United Kingdom. 101.36.
  • United States. 121.38.
  • All countries - Global Debt. no data.

Who owns over 70% of the US debt? ›

Who owns the most U.S. debt? Around 70 percent of U.S. debt is held by domestic financial actors and institutions in the United States. U.S. Treasuries represent a convenient, liquid, low-risk store of value.

Why is Japan's debt not a problem? ›

Around 70% of Japanese government bonds are purchased by the Bank of Japan, and much of the remainder is purchased by Japanese banks and trust funds, which largely insulates the prices and yields of such bonds from the effects of the global bond market and reduces their sensitivity to credit rating changes.

What country is in the worst debt? ›

Debt-to-GDP Ratio for Advanced Economies in 2023

From 20 economies analyzed, 11 have a debt-to-GDP ratio of over 100%. At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023.

Does Britain still owe America money? ›

How much does the UK owe the US? Nothing. As previously stated the UK's war debt to the US was finally paid off in 2006, every last dollar.

How much does China owe the United States? ›

The United States pays interest on approximately $850 billion in debt held by the People's Republic of China. China, however, is currently in default on its sovereign debt held by American bondholders.

Who owns most of America's debt? ›

Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).

Which country has the best economy? ›

The United States is the undisputed heavyweight when it comes to the economies of the world. America's gross domestic product in 2022 was more than 40% greater than that of China, the world No. 2. Even more striking, U.S. GDP was over five times that of the next two largest economies, Japan and Germany.

Why is US debt so high? ›

It began rising at a fast rate in the 1980's and was accelerated through events like the Iraq Wars and the 2008 Great Recession. Most recently, the debt made another big jump thanks to the pandemic with the federal government spending significantly more than it took in to keep the country running.

What happens if China dumps US debt? ›

If China (or any other nation that has a trade surplus with the U.S.) stops buying U.S. Treasuries or even starts dumping its U.S. forex reserves, its trade surplus would become a trade deficit—something which no export-oriented economy would want, as they would be worse off as a result.

Can China call in US debt? ›

Nations like China typically hold US debt in the form of various US Treasury debt, including bonds and other notes. None of these instruments allow debt holders to simply demand repayment…you get the terms and conditions associated with the bond and there's little flexibility to “calling in all of their debts”.

How can the US get out of debt? ›

Tax hikes alone are rarely enough to stimulate the economy and pay down debt. Governments often issue debt in the form of bonds to raise money. Spending cuts and tax hikes combined have helped lower the deficit. Bailouts and debt defaults have disadvantages but can help a government solve a debt problem.

Is there a country with 0 debt? ›

In fact, very much like Norway, Singapore has more assets than debt. Which means that de facto the Singaporean government has no net debt. And what is more impressive, without the vast natural resources Singapore has. This is a privileged situation to be in, but Singaporeans have earned that privilege.

What country is the US most in debt to? ›

Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).

What is Japan's debt? ›

That debt has grown to the equivalent of more than 250% of the nation's economy, more than any of its peers, according to data from the International Monetary Fund. And, he says, that's given the Bank of Japan a strong incentive to keep interest rates low to hold down the government's costs.

How much debt is Russia in? ›

In the latest reports, Russia National Government Debt reached 281.6 USD bn in Feb 2024. The country's Nominal GDP reached 494.7 USD bn in Mar 2023.

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