Debt-to-GDP Ratio

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

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 ?
TORONTO - Leaders of the Group of 20 nations agreed Sunday that advanced economies will aim to halve deficits by 2013 and cut or stabilize the government debt-to-gross domestic product ratios by 2016, according to a declaration released after their meeting.