Economics Essay

695 WordsMar 14, 20133 Pages
In economics, the debt-to-GDP ratio is one of the indicators of the health of an economy. It is the amount of national debt of a country as a percentage of its Gross Domestic Product (GDP). A low debt-to-GDP ratio indicates an economy that produces a large number of goods and services and probably profits that are high enough to pay back debts. The debt-to-GDP ratio is generally expressed as a percentage, but properly has units of years, With currency units of US Dollars (or any other currency) and time units of years (GDP per annum), this yields the ratio as having units of years, which can be interpreted as "the number of years to pay off debt, if all of GDP is devoted to debt repayment". Debt-to-GDP measures the financial leverage of an economy, and high levels of government debt Lebanon: (2011) Lebanon’s gross public debt remained virtually unchanged during the first half of this year, registering two declines in January and February 2011, and three increases in March, April and May. Gross public debt fell again in June, reaching $52.5 billion at the end of that month, a 0.1 percent decrease from December 2010. At around 133 percent, Lebanon’s debt-to-GDP ratio is one of the highest in the world. The deficit now totals LL1.304 trillion ($860 billion). Domestic debt fell by 0.6 percent during the first half of the year, totaling $31.8 billion. Foreign currency debt increased by 0.6 percent during this period, amounting to $20.7 billion. Net public debt, increased by 1.3 percent during the first half of 2011, amounting to $45.6 billion. The figure excludes public sector deposits at commercial banks and the Central Bank. Lebanon comes in 4th : at 136.2 Debt ratio to GDP in 2011 : 4 | Lebanon | 136.2 | 2011 | IMF | Lebanon’s “debt-to-GDP ratio, which was as high as 180 percent in 2006, stands now at around 135 percent. This improvement in

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