Debt-to-GDP Ratio
A country's government debt divided by the size of its economy, a common gauge of how heavy its debt load is.
In plain English
A country's government debt divided by the size of its economy, a common gauge of how heavy its debt load is.
The debt-to-GDP ratio compares what a government owes with what the whole economy produces in a year (GDP). A ratio of 100% means debt equals one year's output.
There is no magic danger line. Japan has carried very high debt for years with low interest rates, while smaller countries with far less debt have hit crises. What matters is who holds the debt, what currency it is in and whether lenders stay confident.
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