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Economics vocabulary · Fiscal Policy and Public Finance

debt-to-GDP ratio

Meaning in economics, with examples

nounCommon term

In economics, debt-to-GDP ratio means: A country's public debt divided by its annual GDP and shown as a percentage; it shows how heavy the debt is compared with the size of the economy.

In Turkish: borç/GSYH oranı, kamu borcunun GSYH'ye oranı

How it is used

Used by governments, credit rating agencies and the IMF to judge the health of the public finances. In the EU, the Maastricht rules set a reference value of 60% of GDP. The ratio can fall even while debt grows, if nominal GDP grows faster.

Example sentences

  1. The country's debt-to-GDP ratio rose above 100% after years of deficits.

  2. Thanks to fast nominal growth, the debt-to-GDP ratio fell even though the government kept borrowing.

Common collocations

  • a high debt-to-GDP ratio
  • reduce the debt-to-GDP ratio
  • a debt-to-GDP ratio of
  • debt ratio
  • public debtThe total amount of money that a government owes to lenders at home and abroad, built up over years of borrowing.
  • GDPShort for gross domestic product: the total value of all final goods and services produced within a country in a given period, usually a quarter or a year.
  • budget deficitThe gap that appears when a government spends more than it collects in taxes and other revenue during a year; it is usually covered by borrowing.
  • defaultTo fail to pay interest or repay a loan or bond on time; the noun default describes this failure.

More terms: Fiscal Policy and Public Finance

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This page explains English vocabulary for learners. It is not financial advice.