Debtor Nation

What Does Debtor Nation Mean?
A nation with a cumulative balance of payments deficit. A debtor nation has negative net investment after recording all of the financial transactions it has completed worldwide.

Investopedia explains Debtor Nation
Nations that have invested fewer resources than the rest of the world has invested in them are known as debtor nations. In 2006, The United States was the world's biggest debtor nation, posting a trade deficit of more than $61 billion and total debt of trillions of dollars.

One of the biggest contributors to America's status as debtor is the availability of inexpensive manufacturing capabilities in China, as more and more U.S.-based businesses spend vast amounts of money in China for that purpose.

Related Terms

Balance Of Payments - BOP
Balance Of Trade - BOT
Credit Tranche
Creditor Nation
Dollar Drain
Most Favored Nation Clause
Trade Deficit
More Related Terms

Related Links

What Is The Balance Of Payments? - Countries track money coming in and going out through something called the balance of payments. Learn more here.
Understanding The Current Account In The Balance Of Payments - Learn how a country's current account balance reflects the country's economic health.
Understanding Capital And Financial Accounts In The Balance Of Payments - Learn how these accounts are intertwined and what they tell us.
Current Account Deficits: Government Investment Or Irresponsibility? - Deficit can be a sign of trouble for some countries, and of health for others. Find out what it means when more funds are exiting than entering a nation.

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