Global inflation is on the rise, and with it, a consequential surge in worldwide debt levels. As reported recently, the global debt has sky-rocketed to an alarming $305 trillion, surpassing pre-pandemic figures by a whopping $45 trillion. In response to these alarming figures, the World Economic Forum has issued a grave warning of an impending worldwide recession due for 2023.
In a study that aims to shine a light on these numbers, finance experts at Moneyzine delved into consumer credit levels across 65 countries, revealing the nations that are the biggest “debt slaves”. Simultaneously, the team offered guidance on how to navigate and avoid the perils of these debt traps.
According to the data, Switzerland surprisingly tops the list of countries with the most consumer credit debt per person, with an astounding average of $193.10. This figure is 93% higher than the global average of $12.98, reflecting a significant debt crisis within the country, considering its reputation as one of the world’s wealthiest nations. Approximately one in six Swiss households finds itself embroiled in debt.
Hot on Switzerland’s heels is Australia, with an average credit debt per person of $137.86. As the country’s monthly credit card purchases reach an all-time high of $33.5 billion, credit card debt has emerged as the top concern for Australians. It’s become so concerning that it’s the primary reason Australians are calling the National Debt Helpline, surpassing even electricity bills.
Norway finds itself in third place, averaging $108.76 in consumer debt per person. Despite being the ninth most expensive country to live in, Norwegians are grappling with these mounting debts alongside a hefty monthly cost of living amounting to $2,074.
Trailing behind in fourth and fifth places are Japan and France with per-person consumer debt averaging at $47.53 and $44.40, respectively.
This escalating debt scenario paints a somber picture of the economic landscape in 2023. Jonathan Merry, CEO of Moneyzine, shares some advice on how to avoid falling into the trap of unmanageable debt. He emphasizes that consumer credit, while not inherently harmful, can become a precarious slope when misused to finance unaffordable lifestyles.
He advises, “The danger comes when people continue to take out loans or finance options to buy things they can’t afford…One of the best ways to avoid getting into financial situations that you can’t afford is by keeping track of your spending every month… By tracking your spending, you can better prepare for the future and reduce the need for payday loans with high interest rates.”
This economic climate serves as a stark reminder of the necessity to live within one’s means and to manage finances prudently. Financial literacy and sound advice are key to overcoming these challenges, as is the need to continue to address global financial systems that facilitate these high levels of debt. As the world faces down an impending economic downturn, there is an urgent need to address this growing financial epidemic and provide support for those most affected.
