Debt-to-GDP ratio

Public sector finances.

Debt-to-GDP ratio is the ratio between a country's national debt and its gross domestic product (GDP).

This ratio is used to gauge a country's ability to service its debt.

A high ratio means a country is not producing or earning enough to service its debt.

A low ratio means there is plenty of economic activity to generate the value to meet the commitments.

Ongoing deficits in the UK

"The net effect of the coronavirus impact and the policy response is likely to be a sharp (but largely temporary) increase in [UK] government borrowing that will leave public sector net debt permanently higher as a share of GDP...

Before the impact of the coronavirus became clear, the government was content to run an ongoing deficit that would broadly stabilise the debt-to-GDP ratio over the medium term rather than reduce it – a judgement that it will no doubt re-visit in the wake of the current crisis."

The UK OBR’s coronavirus analysis, 14 April 2020

See also

• COVID-19
• Debt
• Deficit
• Gross domestic product
• Office for Budget Responsibility (OBR)
• Public sector
• Ratio