Suggestions that Australia is the second-most-likely country in the world to suffer a debt crisis and recession within three years are overblown, Capital Economics says in a rebuttal to a high-profile article by economist Steve Keen.

In an article published last week by Forbes magazine, Professor Keen, an Australian-born economist, used a rule of thumb and data from the Bank of International Settlements to predict the seven countries most vulnerable to a debt crisis and recession over the next one to three years.

Citi's analysts warn there is likely to be resistance within the RBA for hikes given the risk of a rise in the currency. Credit:afr

Australia placed at No.2 in the list of seven, despite not having experienced a recession in 25 years. China, whose economy has faltered in the past two years, came in at number one, while Hong Kong, South Korea, Canada and Norway completed the list.

Professor Keen, who is head of economics, politics and history at Kingston University in London, suggested that a country is at risk if the level of debt held by the non-financial private sector is worth more than 175 per cent of that country's GDP and if that debt-to-GDP ratio has risen by more than 10 percentage points over the past year.