There are certain standards for monitoring indicators of the scale of foreign debt. For example, the requirement for debt ratio refers to the ratio of the balance of foreign debt to gross domestic product, which generally should not be higher than 10%. The standard for the burden indicator is the ratio of the current year's foreign debt principal and interest payments to the current year's fiscal expenditure, which generally cannot be higher than 10%, etc. The following is an introduction to the detailed regulations for monitoring indicators of the scale of these foreign debts.
The monitoring indicators of the scale of external debt are mainly divided into three categories:
(1) The total amount of external debt Indicator
It is an estimate of the ability to bear foreign debt, reflecting the relationship between the balance of foreign debt and the strength of the national economy. The main ones are:
(1) Debt ratio, which refers to the ratio of external debt balance to gross domestic product, generally shall not be higher than 10%;
(2) Debt ratio, also known as debt ratio, refers to the ratio of the balance of external debt to the amount of foreign exchange earnings from exports of goods and services in the year, which generally cannot exceed 100%.
(2) Indicator of external debt burden
It is an estimate of external debt solvency, reflecting the current year’s The relationship between principal and interest repayment and economic strength. The main ones are:
(1) Debt servicing ratio refers to the ratio of the amount of principal and interest repayment of domestic and foreign debt in one year to the amount of foreign exchange income from exported goods and services. Generally, it refers to the coefficient It is 20%;
(2) The ratio of the current year’s foreign debt repayment of principal and interest to the current year’s fiscal expenditure shall generally not be higher than 10%.
(3) External debt structure indicator
It measures external debt under the given scale of external debt. An indicator of its own internal quality. The cost of borrowing is mainly reflected through various comparative relationships within debt. It also predicts the repayment time and repayment ability, aiming to reduce borrowing costs, adjust debt structure, and disperse debt risks. The main indicators include category structure, interest rate structure, term structure and currency structure.
Using the above indicators to analyze a country’s foreign debt burden, we can see whether it has the ability to repay principal and interest. If it exceeds the above warning line or safety line, it indicates that the country has a debt crisis.
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