From the monthly archives:

March 2015

The high point of economic development (at least according to some secular economists) is the availability of disposable income for the average citizen. How do the figures look recently?

A Global Geographic View

The first view is a geographic view of the numbers (the chart is interactive). The countries with the lowest average monthly disposable income are color coded by dark orange. Disposable income increases slowly as the color become bluer, with the countries with the highest average monthly disposable income in dark blue.

A Perspective from the Geographic View

The map view provides some perspective on where the countries are with high and low average monthly disposable income (an interactive version is here). It’s fairly easy to see that, by and large, the western world (North America, Europe, Australia) generally have higher average monthly disposable income than South American, Asian, or African nations.

Monthly Disposable Income Across the Globe

A Table View of the Figures

The geographic view makes it difficult to compare countries. Here’s a table view of the numbers  (an interactive version is here). As a frame of reference, the vertical line down the middle is the average, which is $1,275 per month.

Interestingly, the country with the highest average monthly disposable income is Switzerland at $6,302, well ahead of second place Luxembourg at $4,480. Fascinatingly, in third place is Zambia at $4,331, followed by Jersey at $4,323, and Bermuda at $4,250.

The bottom five members of the top 10 include Norway at $4,215, Monaco at $4,143, Qatar at $4,038, Gibraltar at $3,991, and Australia at $3,781.

Where Do the Big Countries Show Up?

Seeing a good number of small countries show up high on the list, one might ask – where are the big countries? Interestingly, the United States places 13th at $3,259. China, soon to be the globe’s largest economy by most measures, shows up 88th at $751. Japan and Russia, the other two behemoth Asian economies, show up in 24th and 95th at $2,782 and $686 respectively.

The two highest African countries are Zambia at $4,331 and Angola at $2,650. In South America, the country with the highest average monthly disposable income is Argentina at $1,019.

Complete List of Monthly Disposable Income by Country


When looking at disposable income across the globe, the figures show some surprising results. The world’s largest economy by many measures, the United States, fails to make it into the top 10, coming in 13th among 176 nations covered by the study.  The lack of finding the United States in the top 10 is not all that surprising when looking at how the other large economies around the globe show up.

The largest European economy, Germany, places 22nd, with France at 26th, and the United Kingdom at 19th.

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Moreso than ever before, the world has been financialized. The increased financialization means that loans and other borrowing instruments are quite important to economic growth.

Within this vein, some interesting trends have emerged over the past few years.

Non-Performing Loans

The following is a look at countries with non-performing loans above 6.6% of their total loans balances. The list includes some concerning areas.

The Three Worst

On top of the non-performing loans list is Cyprus, at 40.2%. In second place is Greece at 39.9%. In third place is another European country, Ireland, at 30.3%.

Take a step back and think about it.  About 40% of all loans are not being paid back in Cyprus and Greece.

Amazing.  In a sad way.

Others on the List

The list, of course, doesn’t stop with teetering European economies. Other members with non-performing loans above 20% include Albania (25.3%), Romania (25.3%), Sierra Leone (24.7%), Senegal (22.8%), Slovenia (21.2%), and Serbia (20.3).

Other big economies on the list include Italy (16.9%), Portugal (12.9%), Ukraine (12.9%), and Spain (9.4%).


The Other End of the Non-Performing List

Now take a look at economies on the other end of the non-performing spectrum. The best area where individuals and businesses are having little difficulty paying back their loans is Estonia at 0.2%.

Interestingly, the list includes not only very wealthy economies, but some small, globally less significant areas.

Large economies on this list include at the United States at 2.8%, Brazil at 2.7%, Japan at 2.3%, Australia at 1.1%, China at 1.0%, South Korea at 0.8%, and Canada at 0.4%.


How Has the Situation Changed over the Past 3 Years?

A 2014 snapshot, of course, doesn’t provide a complete view. Here’s a look at what non-performing loans have done for selected countries since 2012.

The green dot represents where the percentage of non-performing loans were in 2012. In orange is 2013. In blue is 2014.

Large Increases

Some countries at the top have experienced some large expansions in their non-performing loans.

Greece, for example, saw the percentage of loans classified as non-performing jump from 31% in 2013 to 40% in 2014. Cyprus experienced a similar jump over the same period, with non-performing loans going from 30% to 40%.

Small Changes

Interestingly, the large jumps in countries such as Greece or Cyprus was not matched by countries where non-performing loan figures improved. Improvement in countries such as the U.S, China, Australia, and South Africa was marginal.  The figures barely improved.



Overall, non-performing loans exploded in certain areas of the globe in 2014. Can non-performing loans be a trigger for broader global turmoil in this year or the next?

The answer is, unsurprisingly, maybe.  After all, all it took to send the global economy into a terrible recession in 2008 were a few areas of the U.S. housing market.  The weakness in certain U.S. housing markets snowballed across the globe.  The same type of experience could happen here.

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Fifty years from now, when economists debate the major themes of the first half of the 21st century, could the first half be known as the debt era?

Debt to GDP

Here’s a map of the global debt to GDP landscape. Perhaps completely unsurprising to seasoned professionals in the investment banking world, the map shows the dominance of debt in European countries.

European countries are, of course, not alone.  Some other high debt load countries include Japan, the United States, Indonesia, China, and a few others.  Of this group, probably the only really surprising member is China.

Also interesting when looking at the geography behind the debt picture is the lack of large debt burdens in Russia and many South American countries.  One likely explanation for this is the concern bond markets have for the stability of the given countries’ financial systems.

The Debt Era

Detailed Views


Here’s a detailed view of Europe. As mentioned, European countries are loaded with debt. The highest on the debt list is Ireland at 390%.  Ireland’s profligacy is followed by Portugal, Belgium, Netherlands, and Greece.

Other European countries with debt burdens above the 200% watermark are Spain, Denmark, Sweden, France, Italy, United Kingdom, Norway, Finland, Austria, and Hungary. Interestingly, the strongest members of the EU – Germany – has a relatively low debt burden at 188%.  Guess it pays to be efficient and prudent.

The Debt Picture in Europe

South America

The debt picture is somewhat different in South America. The country with the highest debt load is Brazil at 162%.

The Debt Picture in South America


The debt picture in Asia is somewhat surprising. Of the interesting numbers is the lack of profligate spending in Russia, with a debt to GDP burden of only 65%. On the other end, some of the world’s most highly indebted countries call East Asia home, including Japan at 400% and Singapore at 382%. Also interesting is the 217% debt burden in China.

The Debt Picture in Asia

North America

In North America, the U.S. has the highest burdened citizens at 233%, followed by Canada at 221%. The other end includes Mexico at a mere 73%.

The Debt Picture in North America

The Table

Here’s a table view of the debt to GDP picture.

Debt to GDP

What Has Debt Done Since 2007?

Certainly, some of the massive debt expansion has the global financial crisis of 2007 to 2008 to blame. Here’s a look at how the debt picture has changed since 2007 to 2014 Q2.

The column on the farthest left is debt to GDP. The second column is total debt growth since 2007. The third column is corporate debt growth since 2007. The fourth column is household debt expansion since 2007. The right column is the debt change in the financial sector since 2007. A couple of things stand out.

First, government debt has exploded much quicker than household or corporate debt.

Second, it’s hard to tell which sector expanded quicker overall – corporations or households – indicating that the two have a closer view of the usefulness of debt than governments do.

Debt Picture Change, 2007 - 2014


Overall, debt picture is part surprising, part alarming, and part amusing. There’s lot of ways the debt world could deal with the massive debt loads in various areas of the world, but one thing is certain.  It will have to be dealt with sooner rather than later, regardless of what current Greek politicians think.

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