Debt-to-GDP Ratio

(redirected from Debt-to-Gross Domestic Product Ratio)

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 ?
The public debt-to-gross domestic product ratio has declined, despite the large budgetary costs of implementing the new constitution, preparing for the March elections, and the recent wage increases in the civil service.
Juncker has clashed publicly with Lagarde over extending Greece's agreed debt-to-gross domestic product ratio target.
Lebanon's debt-to-gross domestic product ratio dipped to 162 percent from 180 percent over the past three years, but at $47.