An assessment from the International Monetary Fund (IMF) has found that the UK’s public finances are among the weakest in the world.

The UK was in the second weakest position in the health check on the wealth of 31 nations, with only Portugal in a worse state.

According to the assessment, which includes wealth and stress tests, the UK did poorly largely thanks to the bailout of UK banks after the financial crisis.

“The United Kingdom balance sheet expanded massively during the crisis. Most of the expansion in the balance sheet was the result of large-scale financial sector rescue operations that resulted in reclassification of the rescued private banks into the public sector. [This] increased (non–central bank) public financial corporation liabilities from zero in 2007 to 189% of GDP in 2008, with similar [falls] in financial assets,” said the report.

Top of the list was Norway, who holds most of its wealth in oil. Countries including the Gambia, Uganda and Kenya also ranked above the UK due to their higher net wealth relative to GDP.

Italy, Barbados and Greece were excluded from the broader tests and therefore would have had a lower rating than the UK.

The IMF said: “Better balance sheet management enables countries to increase revenues, reduce risks and improve fiscal policymaking. Countries with stronger balance sheets pay lower interest on their debt. Evidence also shows that countries with strong balance sheets experience shallower and shorter recessions.”

The IMF added that publishing a public sector balance sheet will help to “avoid the fiscal illusion that arises when governments on face value improve the fiscal position by lowering the immediate debt and deficits, but reduce net worth over time”.