Narrowly, the loans outstanding of individual countries, usually negotiated by their respective governments.
More broadly, the total amounts of loans owned both by central governments and by quasi-governmental organisations, including local government organisations, local central banks and other state-owned enterprises.
- Sovereign debt hurts private sector
- "High levels of sovereign debt also affect the private sector directly, such as through the government’s inability to provide ongoing support in a prolonged recession or economic setbacks during the recovery.
- Governments that are near or in debt distress do not have room to provide even temporary fiscal support to firms and households.
- Moreover, an increase in the risk of debt distress typically leads to a downgrade in the sovereign credit rating, which sets off self-fulfilling dynamics because the downgrade itself deteriorates macroeconomic fundamentals and the access to capital by private firms."
- International Monetary Fund - World Development Report 2022 - p207.
- Credit rating
- Debt distress
- eurozone crisis
- Private sector
- Sovereign debt crisis
- Sovereign risk
- The Brady Plan