{"id":239967,"date":"2023-04-27T21:50:45","date_gmt":"2023-04-27T16:20:45","guid":{"rendered":"https:\/\/blog.forumias.com\/?page_id=239967"},"modified":"2023-04-27T21:50:45","modified_gmt":"2023-04-27T16:20:45","slug":"debt-to-gdp-ratio","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/debt-to-gdp-ratio\/","title":{"rendered":"Debt to GDP ratio"},"content":{"rendered":"<p><span data-contrast=\"auto\">Debt-to-GDP ratio measures how much a nation owes in relation to its GDP. It is a trustworthy predictor of a nation&#8217;s ability to pay down its debts.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:256}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"39\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559684&quot;:-2,&quot;335559685&quot;:360,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">A healthy economy is one that produces and sells goods and services without accruing more debt. A low debt-to-GDP ratio is a sign of that.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:256}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"39\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559684&quot;:-2,&quot;335559685&quot;:360,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">If a portion of the country experiences a debt default, both local and foreign markets will experience a financial panic. A greater debt-to-GDP ratio increases the likelihood of default.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:256}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"39\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559684&quot;:-2,&quot;335559685&quot;:360,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">External debts, often known as &#8220;public debts,&#8221; are any sums owing to foreign lenders. These are generally difficult for a country with a high debt-to-GDP ratio to pay off.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:256}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"39\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559684&quot;:-2,&quot;335559685&quot;:360,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">In these situations, lenders frequently ask for higher interest rates. Extremely high debt-to-GDP ratios may discourage creditors from making any loans at all.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:256}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><b><span data-contrast=\"auto\">Sustainable Debt-to-GDP Ratio: <\/span><\/b><span data-contrast=\"auto\">According to IMF: \u201ca country can achieve sustainable external debt if its future and current external debt service obligations are met in full, without accumulating more debt and without compromising growth\u201d.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:256}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:256}\">Currently, India&#8217;s debt to GDP ratio is 84%. Economic Survey 2022-23 opines that a<\/span> positive growth-interest rate differential helped keep government debt-to-GDP ratio at sustainable levels.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Debt-to-GDP ratio measures how much a nation owes in relation to its GDP. It is a trustworthy predictor of a nation&#8217;s ability to pay down its debts.\u00a0 A healthy economy is one that produces and sells goods and services without accruing more debt. A low debt-to-GDP ratio is a sign of that.\u00a0 If a portion&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/debt-to-gdp-ratio\/\">Continue reading <span class=\"screen-reader-text\">Debt to GDP ratio<\/span><\/a><\/p>\n","protected":false},"author":10341,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-239967","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/239967","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10341"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=239967"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/239967\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=239967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}