(e) Debt service coverage

Indeed, the ICBC s non performing loan (NPL) ratio for LFP loans is as low as 0.3 , while the corresponding coverage ratio the bank s ability to absorb losses from NPLs is 1,066 . According to the NAO, the NPL ratio for the RMB10.7 trillion in local government debt is roughly 2.3 .

Debt service coverage and bond interest

This sharp devaluation increased further the cost of debt servicing and the debt to GDP ratio.

A public debt crisis in Japan (as the combination of recession, deflation, and high deficits drove up the debt GDP ratio).

Even with the latest deal, Greece s debt ratio remains at 120 of last year s GDP. With a projected drop in GDP of 7 this year and a sustained deficit, the debt ratio would exceed 130 before stabilizing at 120 in 2020.

It is estimated that the debt export ratio in net present value terms is high (187 per cent), suggesting that Haiti's debt is unsustainable.

The ECLAC region's debt to export ratio is higher than that of any other developing region.

In 2004 the ratio of debt servicing to exports was 10.0 per cent (see figure below).

Although the government s stimulus policies have increased the national debt, the debt GDP ratio remains relatively low, at roughly 37 . Public debt in Japan, by contrast, exceeds 220 of GDP.

Third, though China s public debt GDP ratio is officially still under 20 , since the onset of the global financial crisis in 2008, its fiscal position has deteriorated. If the government s contingent liabilities are included, China s debt GDP ratio may be closer to 50 .

The ratio of debt to exports was 83.4 per cent, likewise one of the lowest in the region.

The Expert Group agreed that such a coverage ratio would not be sufficient to collect sufficient data for use in the calculation of price indexes.

It narrows government budget deficits by increasing tax revenues and limiting welfare spending. By raising the denominator of the debt GDP ratio, it enhances confidence in debt sustainability.

Starting from 1999, the first year of recession, fiscal deficits rose substantially, alongside the public debt to GDP ratio.

The ratio of debt service to exports for these countries has declined to an average of 10 per cent.

Owing to strong GDP growth, the debt to GDP ratio decreased from 100.2 per cent to 95.1 per cent.

debt service coverage reduces the financial risk to investors and translates into lower borrowing costs for the borrower.

For Greece, with an overall deficit of 4.1 of GDP and a debt GDP ratio of 170 , the debt ratio would fall if the combination of inflation and real (inflation adjusted) GDP growth exceeded 2.4 . Stated differently, now that Greece has achieved a zero primary budget deficit, its debt burden will decline if its nominal growth rate exceeds the average interest that it pays on its government debt.

Lower interest rates on loans are available in capital markets to borrowers who have ample debt service coverage , which is defined as total revenues available for debt service as a percentage of the required debt service.

In 1996, when Japan s public debt GDP ratio reached 80 , many Japanese economists and officials worried about a looming crisis. Almost two decades later, the ratio has surpassed 200 and still no crisis has erupted.

In particular, they should have paid greater attention to the sustainability of US mortgage and consumer debt. In 2007, the mortgage and consumer debt to GDP ratio was more than 90 , compared to 24 for net foreign debt.

In fact, China s high debt GDP ratio is, to a large extent, a result of its simultaneously high saving and investment rates. And, while the inability to repay loans can contribute to a high debt burden, the nonperforming loan (NPL) ratio for China s major banks stands at less than 1 .

Indeed, according to the OECD, by the end of this year, America s national debt GDP ratio will climb to 108.6 . Public debt in the eurozone stands at 99.1 of GDP, led by France, where the ratio is expected to reach 105.5 , and the United Kingdom, where it will reach 104.2 .

The personal debt to income ratio basically went from 65 percent to 135 percent in the span of about 15 years.

France s debt GDP ratio is already around 90 even if its 2013 budget deficit does not exceed 3.5 of GDP, its debt GDP ratio will have climbed to 93 by the end of the year. The government s GDP share, at 56 , is the highest in the eurozone and second highest among all developed countries.

The residents sector accounts for an increasing share of the total debt in the real economy, and the leverage ratio has risen rapidly.

Likewise, while Japan has the highest debt to GDP ratio among rich countries, this is not a serious problem because the debt is domestically held. And Europe s debt problems are now widely acknowledged to be due to ill conceived aspects of European integration.

When considering today s concern about Japan s high public debt to GDP ratio, now at 202 on a gross basis, one needs to reflect that the ratio would most likely be profoundly lower if Japan had in the past financed more of its deficit spending with trills instead of conventional debt, and issued them to investors around the world. A lower debt burden would certainly help Japan deal with its economic slowdown.

In 2012, as the debt to GDP ratio skyrocketed, Greece s private creditors were given a significant 34 haircut. At the same time, however, new loans worth 63 of GDP were added to Greece s national debt.

If you deliberately aim to shrink your GDP, your debt to GDP ratio is bound to grow. The only way to cut your debt (other than by default) is to get your economy to grow.

The increase in exports of goods and services and the decline in debt service for developing countries as a group resulted in a significant decline in the debt service to exports ratio, from 17.2 per cent in 2003 to 12.5 per cent in 2004, marking the largest decline in this ratio in the last 20 years.

Even more fundamental arithmetic lies at the core of the debt quandary. The tax rate required to fund social welfare benefits depends on three factors the dependency ratio (the ratio of recipients to taxpayers) the replacement rate (the ratio of benefits to average wages) and the economic growth rate (roughly, productivity plus population growth).

China's household debt ratio is close to the United States. Is being unable to repay loan more frightening than being unable to afford a home?

In addition, given that local government debt comprises 27 of China s 2010 GDP, while central government debt and policy loans stand at 20 and 6 of GDP, respectively, the total public debt to GDP ratio is approximately 53 lower than Germany s. So, while China should not be complacent about local government debt, panic is unwarranted.

As a result of greatly expanded GDP in 2004, the public debt to GDP ratio declined slightly, to 180 per cent, but is still very high.

The Government of Jordan continued its efforts to restructure the public debt stock, gradually replacing external by domestic sources with the external debt to GDP ratio declining from 76.4 per cent to 69.7 per cent during 2003 2004.

Nor is it alarming. The US economy grew rapidly for several years after WWII with a higher debt GDP ratio, and today s ratio is lower than in all other major industrial countries (and roughly half that of Greece, analogies to which are absurd and misleading).

The main pillar of our programme is the fiscal adjustment needed to limit external vulnerability and the increase of Croatia's external debt to gross domestic product ratio.

The low return on investment and slow export growth in landlocked developing countries have been key causes of the build up of an unsustainable external debt with an external debt to export ratio of 221 per cent and an external debt to GDP ratio of 67 per cent in 2003 against ratios of 106 per cent and 36 per cent, respectively, for developing countries as a whole in the same year (see tables 3 and 4).

Creating viable institutions for managing public debt in a democracy is difficult. The mechanisms currently on offer are treaty based, constitutional, and statutory debt ceilings, pegged as a ratio of GDP, or, as in the US, established in nominal terms.

The growth of gross national income (GNI) in developing countries outpaced the growth in debt in 2004, improving the total debt to income ratio for all developing countries to an estimated 35.2 per cent, down from 38.6 per cent in 2003.

The Argentine Government estimated that after restructuring, the ratio of debt in foreign currency to exports was reduced from 527 per cent (in December 2001) to 230 per cent, and the ratio of interest payments to fiscal revenue diminished from 22 per cent to 10 per cent.

According to a study by the Chinese Academy of Social Sciences, the debt GDP ratio for China s nonfinancial corporations was 113 by the end of 2012. Standard amp

It has no economic justification. In the long run, additional targeted spending cuts will be necessary as part of a balanced package to stabilize the debt GDP ratio.