The 15 Biggest Deficits In The Developed World

Ireland, tug of war

Photo: Wikimedia Commons

Countries that were lax with spending, have seen their public debt swell to unmanageable highs. But its years of deficit, that typically builds massive public debt.

Drawing on OECD data, we picked out 15 developed countries and looked at their expected deficit for 2011. Average OECD deficit is estimated at 6.7% of GDP in 2011.

Seven countries on this list have a budget deficit higher than the OECD average, and all of them are above the EU limit of 3%.

Note: Deficit data is based on OECD projections for 2011

#15 Luxembourg

Deficit as per cent of GDP: 4.9%

5-year CDS spread: N/A

Luxembourg posted a negligible 0.7% deficit in 2009, which went up to about 3.8% in 2010. Years of a surplus budget however have kept its public debt at 16.2%.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#14 Italy

Deficit as per cent of GDP: 5%

5-year CDS spread: 332.82

Days after the IMF urged Italy to take 'decisive' steps to reduce its deficit from current 4.5% of GDP, Italian Finance Minister Giulio Tremonti said the budget shortfall is likely to beat government targets in 2011 and 2012, because Italy has sped up its spending cuts.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#13 Slovenia

Deficit as per cent of GDP: 5.3%

5-year CDS spread: N/A

The European Commission projected Slovenia's budget deficit to stand at above average 5.8% in 2011, because Slovenia would not take on additional economic measures to curb the deficit.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#12 Slovakia

Deficit as per cent of GDP: 5.3%

5-year CDS spread: 123.96

Slovakia's finance minister expects the country to meet its 4.9% budget deficit target this year. The deficit ballooned in 2009, when the country felt its recession.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#11 Netherlands

Deficit as per cent of GDP: 5.4%

5-year CDS spread: 56.20

Because Netherlands had a relatively low deficit up until the 2009, its public debt was low at about 64.6% of GDP in 2010, according to Eurostat. Deficit is said to be lower than previously thought and is expected to slide to 3.9% over 2011.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#10 Portugal

Deficit as per cent of GDP: 5.6%

5-year CDS spread: 947.49

With the Portuguese economy expected to shrink 2.3% this year, and slow further in 2012, it will be hard for the government to meet its target of reducing deficit to 5.9% of GDP this year, from 9.1% in 2010.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#9 Czech Republic

Deficit as per cent of GDP: 5.7%

5-year CDS spread: 95.50

Czech Prime Minister Petr Necas said the government is working to reduce his country's deficit for the 2012 budget to 3.5%. Deficit is aimed to reach 4.6% this year, and be eliminated entirely by 2016.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#8 Poland

Deficit as per cent of GDP: 6.5%

5-year CDS spread: 166.49

Polish finance minister Jacek Rostowski has said his country is on track to narrow its general government deficit to less than the EU limit of 3% of GDP in 2012.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#7 France

Deficit as per cent of GDP: 6.9%

5-year CDS spread: 125.50

IMF has warned that France is on its way to miss its 3% deficit target for 2013 unless it pushes through more spending cuts. The IMF expects both growth and tax revenues are expected miss government projections.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#6 Spain

Deficit as per cent of GDP: 7%

5-year CDS spread: 390.33

Spain's deficit has eased from 11.2% in 2009, to about 9.4% in 2010. Now Moody's has said it is watching the country's deficit reduction plans, and could make a one-notch downgrade.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#5 Greece

Deficit as per cent of GDP: 7.1%

5-year CDS spread: 1,705.39

Greece's deficit went down to 10.5% of GDP in 2010, from 15.4% in 2009. Now prime minister George Papandreou hopes to bring it down to 7.5% in 2011.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#4 Japan

Deficit as per cent of GDP: 8.3%

5-year CDS spread: 90.19

Japanese deficit has picked up pace, after falling to 2.1% in 2008. With the country posting deficits every year since 1993, its public debt has swelled to 225.% of GDP.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#3 U.S.

Deficit as per cent of GDP: 8.9%

5-year CDS spread: 54.19

With the Senate voting to raise the debt limit, the deal is expected to cut $2.4 trillion off budget deficits over a decade.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#2 UK

Deficit as per cent of GDP: 10.3%

5-year CDS spread: 73.44

Despite punishing austerity measures, UK's June budget deficit came in higher than expected. The Treasury however maintained that fiscal plans were on track and Chancellor George Osborne said the deficit-reduction program would stay in place despite a slowdown in growth.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

#1 Ireland

Deficit as per cent of GDP: 10.8%

5-year CDS spread: 821.65

The Irish finance minister Michael Noonan and Central Bank governor Patrick Honohan said Ireland was on track to achieve its target 10.6% deficit of GDP for 2011.

Deficit data provided by OECD. CDS pricing as at August 1 provided by CMA Datavision via Bloomberg.

Now check out 15 countries with the biggest deb burden...

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.