Debt-to-GDP Ratio

Corporate Finance Financial Ratios Financial Terms Dictionary

Contents

The debt-to-GDP ratio is the ratio of a country’s public debt to its gross domestic product (GDP).

The debt-to-GDP ratio can also be interpreted as the number of years it would take to repay the debt if GDP were used for repayment.
The higher the debt-to-GDP ratio, the less likely a country is to repay its debt, and the higher the risk of default, which could cause financial panic in the domestic and international markets.