Like individuals, countries also take on debt when necessary to complete essential development projects. However, what happens if this debt escalates to a point where repayment becomes difficult? This is where an economic metric called the debt-to-GDP ratio comes into play.
Let’s use this infographic guide to learn what the debt-to-GDP ratio is and how to calculate it for any country or state.
Conclusion
The debt-to-GDP ratio is a critical measure to understand a country’s economic health. The lower this ratio, the stronger the financial resilience against economic struggles.
In simple terms, keeping your debt low compared to your earnings can help you avoid financial hardship.
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
