Click the Original, Code and Reconstruction tabs to read about the issues and how they were fixed.

Original


Source: Visualizing the State of Government Debt Around the World (2019).


Objective

The government debt-do-GDP ratio is an important economic indicator published by the International Monetary Fund. The indicator is a ratio between the total debt of the country vs the total Gross Domestic Product (GDP) of the country. In short, it is the ability of governments to pay their debts without refinancing.

Countries with a higher debt-to-GDP ratio have a higher risk of default, so economists and financial analysts use the country’s government debt-to-GDP index as one of the indicators of the country’s economy.

The visualization publisher, Howmuch.net, has a different target audience. Instead of economists, they target average people keen to make better financial decisions, hence their visualizations are more friendly to non-finance people and have the purpose of generating information and awareness.

Howmuch.net published a visualization for the government debt-to-GDP ratio, which aims to give an overall view of the government’s debt-to-GDP ratio. This visualization, in particular, is hard to interpret due to the three key issues:

  • Issue 1: It fails to deliver a clear message. The data visualization contains two key variables: a nominal variable (country name) and a quantitative variable (debt-to-GDP ratio in %). Although it is clear the country with the highest and lowest debt-to-GDP ratio, the visualization message gets diluted given all the countries with data are plotted together. Furthermore, in the same visualization webpage, there is an additional table explaining the Top 10 countries with the most debt.

  • Issue 2: The colour pattern used, with variations of either red or green is deceptive. It gives the impression countries with more than 50% debt-to-GDP ratio are in trouble, whilst those with less than 50% debt-to-GDP ratio are in good shape. A study published by the World Bank (Investopedia, 2019) found countries that sustained debt-to-GDP ratios higher than the threshold of 77% for developed nations and 64% for emerging markets experienced lower economic growth than countries below that threshold. Also, the visualization designer chose a bright red for the range of 50-99.9%. This range appears to be the one in most countries, so the bright red does not contribute to the effort to understand the visualization.

  • Issue 3: The use of the country’s boundary as the background for a particular data point. The way the boundaries have been structured does not follow a typical map representation. As an example, Italy and the Philippines are shown upside down. Furthermore, the country’s boundary competes with the data itself and does not add value at all.

Reference

Code

To reconstruct the visualization, the data has been downloaded from the IMF website (citation needed) and initial data wrangling processed in Microsoft Excel.

The initial analysis showed the debt ratio values by country published by the IMF are not matching the values published in the data visualization. On the International Monetary website, there is a disclaimer the data provided is “as is” and “as available”, hence this report will use the assumption the visualization was developed based on the data available at the time of publication.

To reconstruct the visualization, the report will use the data from the 2019 calendar year, given it is more recent data than the original visualization and helps to explain the country’s situation before the COVID pandemic. In 2020 and 2021, governments used different strategies to tackle the pandemic, including increasing their debt government debt ratio.

Furthermore, the web page had the purpose to giving awareness of countries with the highest and lowest debt-to-GDP ratio. To align with this message, instead of focusing on all the country data, this report will produce two plots: one with the countries with higher than 100% debt-to-ratio GDP and the second plot will focus on the countries with less than the 20% debt-to-ratio GDP.

The following code has been developed to address the original key issues.

library(here)
library(ggplot2)
library(dplyr)


CountryGDP <- read.csv("imf_report.csv",stringsAsFactors = TRUE)

D_HighDebt <- CountryGDP %>% filter(X2019 >= 100 )

chart_HighDebt <- ggplot(data = D_HighDebt, aes(y = reorder(Country,X2019), x= X2019))
chart_HighDebt <- chart_HighDebt + geom_col(fill = "#A5A5A5", size = 3) +
    labs(title = "Countries with the highest Government Debt Around the World", x = "Debt to GDP Ratio (in %)", y = "Country") +
    theme(axis.text.y = element_text(size = 8))+
    geom_text(aes(label=round(X2019,2)), hjust = 0,size = 2.5)+
    scale_x_continuous(limits = c(0,250))


D_LowDebt <- CountryGDP %>% filter(X2019 <= 25 )

chart_LowDebt <- ggplot(data = D_LowDebt, aes(y = reorder(Country,X2019), x= X2019))
chart_LowDebt <- chart_LowDebt + geom_col(fill = "#4472C4", size = 3) +
    labs(title = "Countries with the lowest Government Debt Around the World", x = "Debt to GDP Ratio (in %)", y = "Country") +
    theme(axis.text.y = element_text(size = 8))+
    geom_text(aes(label=round(X2019,2)), hjust = 0,size = 2.5)+
    scale_x_continuous(limits = c(0,30))

Data Reference

Reconstruction

The following final plots address the three key issues identified: * it delivers a clearer message by focusing on the highest and lowest debt-to-ratio GDP countries * using the bar plot makes it easier to visualize the key values and remove competing information * the change in the colour used helped make the visualization easier to read