Debt-to-GDP Ratio

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Debt-to-GDP Ratio

A ratio of a country's national debt to its GDP. The debt-to-GDP ratio is one way to estimate whether or not a country will be able to repay its debt. The higher the ratio is, the more likely a country is to default because its government has borrowed too much relative to the ability of the country as a whole to repay. This may affect the country's sovereign credit rating. However, this ratio is not the only metric used. For example, the United States and the United Kingdom maintain national debts that approach 100% of GDP, but both have AAA credit ratings because the political risk in both countries is very low.
References in periodicals archive ?
Romer find that countries with more monetary and fiscal policy options at the onset of a crisis, namely those with interest rates well above the zero lower bound and with lower debt-to-GDP ratios, recover more quickly.
The difference in fiscal policy responses is even more pronounced: countries with low debt-to-GDP ratios typically engage in aggressively expansionary fiscal policy after a crisis, while those without such space usually pursue highly contractionary policy.
Estonia, Luxembourg, Bulgaria, the Czech Republic, Romania and Denmark had the lowest debt-to-GDP ratios with 9.
Lending rates are at an all-time low; the Philippines gross international reserves are hefty; its macroeconomic fundamentals are sound with declining debt-to-GDP ratios and prospective growth rate of 7-8 percent pegged for the medium-term.
The table showing estimates of the debt-to-GDP ratios was revised to reflect calculations using nominal GDP instead of previously used real (constant) GDP.
In other words, Saudi Arabia can borrow at cheaper rates than other states who have higher debt-to-GDP ratios or those that have defaulted on their debt obligations previously.
Summary: The kingdom's current debt-to-GDP ratio is what will make such an offer compelling
Overall, flexible exchange-rate regimes mitigate the effects of commodity export price shocks on government fiscal balances, even as those regimes lead to debt-to-GDP ratios that are more sensitive to shocks.
uCaDespite a reduction in the aggregate debt burdens across commodity groups from 1990-2012, our analysis shows that an increase in commodity prices raises the debt-to-GDP ratio for exporters of agricultural raw materials and metals, but lowers this ratio for fuel exporters, when controlling for time and country- specific factors;
For Ireland and Portugal, debt dynamics look less unfavorable than for Greece, while still being very challenging - both countries will have debt-to-GDP ratios of more than 100 per cent by 2012.
In this limiting textbook case, since all countries borrow at the common equilibrium world rate, the cross sectional dispersion of countries' debt-to-GDP ratios will not help to explain the common level of the world real interest rate.
Singapore, for instance, posted a high debt-to-GDP ratio of 98.