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Business Environment Profiles - United States

National debt/deficit to GDP

Published: 16 June 2025

Key Metrics

National debt/deficit to GDP

Total (2025)

100 %

Annualized Growth 2020-25

-1.4 %

Definition of National debt/deficit to GDP

The national debt to gross domestic product (GDP) ratio measures the proportion of gross federal debt to US GDP. Data is sourced from the White House's Office of Management and Budget (OMB).

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Recent Trends – National debt/deficit to GDP

Historically, the ratio of national debt to GDP has varied considerably. Before the 2008 financial crisis, the ratio increased steadily due to an acceleration of defense spending and the growing costs of social security and Medicare. These costs expanded as a percentage of GDP between 2002 and 2008, when a growing US economy enabled the federal government to accelerate investments in these areas without growing deficits too quickly.

However, the economic downturn prompted the US government to ramp up investments to combat the deepest recession since the Great Depression. In turn, the national debt to GDP ratio skyrocketed, with the federal government enacting the American Recovery and Reinvestment Act (ARRA), pumping approximately $787.0 billion into the economy in an attempt to reverse deteriorating economic conditions. As a result, the percentage of debt to GDP expanded quickly in 2009 and 2010, as these stimulus funds were spent on infrastructure, healthcare, economic incentives such as federal tax credits, and social welfare provisions. In 2009, the national debt to GDP ratio jumped from 67.5% to 82.1%, and the ratio continued to climb for several consecutive years, eventually reaching 102.4% in 2014.

According to data from the Congressional Budget Office (CBO), mounting costs from health care programs such as Medicare, Medicaid and the Children's Health Insurance Program, have contributed significantly to recent upticks in the national debt to GDP ratio. While it was previously expected that federal spending for some programs would be scaled back, this has been partially offset by recent changes to the tax code that cut taxes for American workers and corporations in the past few years. This limited the incoming capital for the US government, leading to an increased deficit.

With the economic ramifications the pandemic brought, the United States undertook unprecedented fiscal stimulus measures through the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act to support the economy. Higher unemployment reduced government tax revenues during 2020, which affected the deficit level that needed to be funded by federal debt. As a result, this led to a sharp increase in the federal debt to GDP ratio in 2020.

In 2021, despite the rollout of the American Rescue Plan Act, the federal debt to GDP ratio declined, as pandemic-related outlays fell and revenues edged higher. As the Federal Reserve aggressively raised interest rates to curb inflation during 2022, the federal debt to GDP ratio continued to decline, dropping an additional 0.7%. In 2023, the ratio is forecast to have decreased by 1.5% and delayed interest rate cuts has led to declines of 2.2% and 2.5% in 2024 and 2025, respectively.

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5-Year Outlook – National debt/deficit to GDP

As the US economy expands and experiences the growing costs of social welfare programs, decisions...

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