Debt-to-GDP ratio: Difference between revisions
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imported>Doug Williamson (Classify page.) |
imported>Doug Williamson (l) |
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<span style="color:#4B0082">'''''Ongoing deficits in the UK'''''</span> | <span style="color:#4B0082">'''''Ongoing deficits in the UK'''''</span> | ||
: "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 | : "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'' | :''The UK OBR’s coronavirus analysis, 14 April 2020'' | ||
Revision as of 14:54, 20 May 2020
Public sector finances.
The ratio between government debt and its gross domestic product (GDP).
This ratio is used investors, leaders, and economists to gauge a country's ability to pay off 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
