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Economics vocabulary · Fiscal Policy and Public Finance

Public debt

Meaning in economics, with examples

/ˈpʌblɪk ˈdet/nounCore term

In economics, public debt means: The total amount of money that a government owes to lenders at home and abroad, built up over years of borrowing.

In Turkish: kamu borcu, devlet borcu

How it is used

Also called government debt, national debt or sovereign debt. It is usually compared with the size of the economy (the debt-to-GDP ratio). Governments borrow by issuing bonds; debt rises, piles up or is brought down, and its interest costs appear in the budget.

Example sentences

  1. Public debt rose sharply during the pandemic as governments supported firms and workers.

  2. Interest payments on public debt now take up a large part of the budget.

Common collocations

  • public debt rises
  • reduce public debt
  • public debt levels
  • service the debt
  • sovereign debt
  • 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.
  • debt-to-GDP ratioA 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.
  • defaultTo fail to pay interest or repay a loan or bond on time; the noun default describes this failure.
  • fiscal policyThe government's decisions about taxes and public spending, used to influence demand, growth, jobs and the state of the public finances.

More terms: Fiscal Policy and Public Finance

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