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Government borrowing and debt: international comparisons

Published Friday, October 14, 2016

This note provides international comparisons of government borrowing and debt from 2009 to 2021.

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Summary

Compared to other advanced economies the UK is forecast to have greater than average government borrowing, structural borrowing and net debt as a % of GDP in 2016. Its gross debt is forecast to be below the average for advanced economies as a % of GDP.

Overall government borrowing

The IMF forecast UK borrowing to be 3.3% of GDP in 2016. Amongst advanced economies, five have higher borrowing as a % of GDP. These five include two G7 nations: Japan and the United States. France is forecast to have broadly the same level of borrowing as the UK. The IMF average for advanced economies is 3.0%. 

General government net borrowing, % of GDP

Structural borrowing

Structural, or cyclically-adjusted, borrowing is that part of borrowing which is unrelated to the economic cycle.  It represents “underlying” borrowing or the element of borrowing which will remain even when economies move out of recession.  Structural borrowing cannot be measured directly but is estimated based on a judgement about how far the actual level of output differs from its trend level.  Making these estimates is by no means straightforward so estimates of the structural deficit must be treated with caution.

The IMF estimates that the UK’s structural deficit will be 3.2% of potential GDP in 2016. This is higher than the IMF average for advanced economies of 2.8% of potential GDP.

General government structural borrowing, % of GDP

 

Government gross debt

UK gross debt is forecast to reach 89.0% of GDP in 2016.  This is lower than the average amongst advanced economies of 107.5%. Japan’s gross debt is forecast to reach 250.4% of GDP in 2016.

General government gross debt, % of GDP

Government net debt

The IMF estimates that UK net debt will be 80.5% of GDP in 2016.  This is higher than the average amongst advanced economies of 72.1%. Japan’s net debt is forecast to reach 127.9% of GDP and Portugal’s 121.9% in 2016.

General government net debt, % of GDP

Commons Briefing papers SN06054

Author: Matthew Keep

Topics: Economic policy, Economic situation, Public expenditure

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