Debt-to-GDP ratio

The ratio between government debt and its gross domestic product.

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 enough to pay off its debt. A low ratio means there is plenty of economic output to make the payments.

Ongoing deficit

"The net effect of the coronavirus impact and the policy response is likely to be a sharp (but largely temporary) increase in 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 OBR’s coronavirus analysis, 14 April 2020

See also

• Debt
• Deficit
• Gross domestic product
• Office for Budget Responsibility
• Ratio