In this article, we will look at 15 countries with economic growth or debt problems in 2024. If you want to skip our discussion about the global economy, visit the list of 6 Countries With Economic Growth or Debt Problems in 2024.
The global GDP is projected to rebound slightly in the year 2024. The world’s GDP growth rate has been severely compromised in 2023 as it fell from 3.3% to 2.6%. This year, the global GDP growth rate is expected to reach 2.9%. Some of the factors contributing to this rebound include improving consumer sentiment, China reopening itself for international trade, and an expected dip in energy prices. However, the economic prospect throughout the rest of the decade looks bleak.
Despite some improvement in the world’s economic condition, the global economy will continue to suffer at least till the end of the current decade, which is why experts at the World Bank are calling it a ‘decade of wasted opportunity’. Covid lockdowns and then subsequent regional conflicts have had a negative impact on the global economy. Several countries around the world even experienced negative growth rates during this time.
Tourism, the world’s third largest category of exports after fuel and chemicals suffered the most during lockdowns. It contributed the most to the slowdown of GDP growth as international borders closed. In fact, Marriott International, Inc. (NASDAQ:MAR) even announced the temporary closure of 7,300 of its hotels in April 2020. Earlier in the year, Marriott International, Inc. (NASDAQ:MAR) had lost 6.6% of its revenue. The company took the decision to close down its hotels to cut some of its losses. It is worth noting that 7,300 make for 25% of Marriott International, Inc. (NASDAQ:MAR)’s hotels.
All the countries around the world are facing enormous pressure amid rising interest rates. However, countries with the highest external debts are especially affected because of an increase in their payments. This is especially true for countries with debts in US dollars. As the interest rate in the US increases, the dollar strengthens all around the world, resulting in higher payments. This is one of the reasons why we have seen some countries defaulting on their debt in the recent past.
Although the global economy is better today than it was around the same time last year as the risk of a recession has faded, we are looking at the weakest half-decade in the last thirty years ahead of us. According to a report by the World Bank, the mid-term outlook has darkened for many developing economies. We have already seen an evident slowdown of major economies, as even countries like the United States, Canada, and the UK are on our list of 15 countries with economic growth or debt problems in 2024.
According to the World Bank, global trade growth in 2024 is expected to be half of the average of the decade before the pandemic. In addition, borrowing costs for developing economies, especially those with poor credit ratings, will likely remain steep. This comes at a time when global interest rates are already at four decades high in inflation-adjusted terms.
The cumulation of all the recent economic downturns and inflation has some real effects on the lives of people, especially those living in developing and low-income countries. According to the same report by the World Bank, in about one of every four developing countries, people will still be poorer in 2024 than they were during Covid. The situation is worse for low-income countries, as about people in 40% of those will remain worse off than they were during or before the lockdowns.
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Methodology
To curate our list of the 15 countries with economic growth or debt problems in 2024, we consulted our countries with the highest debt-to-GDP ratio article, and the latest 2023 GDP growth rate figures published by IMF. We selected all the countries mentioned in our article with less than 2% real GDP growth rate. Then we searched for countries with a debt-to-GDP ratio of higher than 70% and a GDP growth rate of less than 2. Finally, we listed countries according to their GDP growth rate. The lower the GDP growth rate, the higher the country ranks on our list.
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15 – Greece
Debt To GDP – 160.2
Real GDP Growth Rate – 2
Greece is one of the countries with economic growth or debt problems in 2024. The country is constantly struggling with economic challenges brought about by poor macroeconomic management, excessive government spending, current account deficits, tax avoidance, and tax evasion. The country’s over-reliance on sectors such as shipping and tourism also contributes to its economic vulnerabilities.
14 – The Bahamas
Debt To GDP – 83.7
Real GDP Growth Rate – 1.8
The Bahamas faces economic challenges such as consistently high fiscal deficits and unemployment rates, hindering economic progress and development. In addition, the country struggles with expensive and unreliable electricity, further worsening its economic troubles. The Bahamas has had a consistently high debt-to-GDP ratio over the last few years which poses further challenges for its fiscal stability and economic growth. In addition, the country lacks a diversified pool of skilled labor, which hampers economic development. The political structure in the country also hinders its growth. Decision-making is highly centralized in the country, which hinders the transparency of the approval process of foreign direct investment.
13 – Spain
Debt To GDP – 104.7
Real GDP Growth Rate – 1.7
Spain is among the top 15 countries with economic growth or debt problems in 2024. Its GDP growth rate slowed down in 2023 because of falling consumption, shortages of raw materials, tightening financial conditions, rising financial burdens on companies and households, and the impact of inflation. The global financial crisis, structural weaknesses in its economy, and high fiscal deficits have landed the country on the list of those with high debt-to-GDP ratios.
12 – Canada
Debt To GDP – 103.3
Real GDP Growth Rate – 1.6
Compared to other developed nations, Canada’s productivity levels remain relatively low, limiting its GDP growth. The country also has one of the highest household debt-to-GDP ratios among the G7 nations, with three-quarters of this debt tied to mortgages. This coupled with the rapid rise in housing prices in the country is putting a strain on its economy. In addition, Canada has an aging population, which could further decrease its productivity in the future. It also has an overall high debt-to-GDP ratio which is a result of its high corporate debt burdens and high combined federal and provincial debts.
11 – Brazil
Debt To GDP – 90.3
Real GDP Growth Rate – 1.5
A significant rise in government spending has fueled higher debt levels in Brazil. In addition, its economy faces challenges such as corruption, slack demand, high inflation, and interest rates, all of which have impacted economic growth and fiscal stability. Brazil’s growth model has relied on factor accumulation rather than productivity-led growth. Its productivity levels in manufacturing and services remain below those of several Latin American countries, limiting sustainable economic growth and potentially contributing to the high debt-to-GDP ratio.
10 – Portugal
Debt To GDP – 104
Real GDP Growth Rate – 1.5
Portugal is 10th on our list of the 15 countries with economic growth or debt problems in 2024. Although debt levels in the country are declining, its debt-to-GDP ratio remains above 100. The country faces severe fiscal sustainability risks over the medium term, mainly due to adverse demographic trends driving up aging-related costs.
9 – United States
Debt To GDP – 126.9
Real GDP Growth Rate – 1.5
The United States is 9th on our list of the 15 countries with economic growth or debt problems in 2024. Its national debt currently exceeds $34 trillion because of deficit spending, the COVID-19 pandemic, and the issuance of government bonds to finance deficits. Some of the reasons for the slowdown of GDP include lower tax receipts during economic downturns, increased safety net spending, and higher budget deficits in the recent past. The country’s government has consistently spent more money than it earns from taxes since 2001. In addition, rising interest rates can increase the cost of servicing the debt, impacting government finances and potentially slowing down economic growth.
8 – France
Debt To GDP – 110.5
Real GDP Growth Rate – 1.3
France is among the top 10 countries with economic growth or debt problems in 2024. The country’s lagging competitiveness and slow growth have impacted France’s ability to effectively manage its debt-to-GDP ratio. Its exports have started to lose their competitiveness, which has resulted in an imbalance between imports and exports.
7 – Finland
Debt To GDP – 73
Real GDP Growth Rate – 1
Finland is 7th on our list of 15 countries with economic growth or debt problems in 2024. The country’s economy contracted in the third quarter of 2023 by 0.7% from the previous quarter. The growth in the supply of labor input is slow, and the high structural unemployment rate reduces the importance of labor as a source of potential output.
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