A critical assessment of the debt-to-GDP ratio in developing countries

Single metrics of public debt – such as the debt-to-GDP ratio – is the most common measure of government debt used in economic analysis due to its simplicity and availability. However, it provides an incomplete profile of a nation’s debt position, which is largely determined by country-specific factors. As such, we undertake a comprehensive and critical assessment of debt-to-GDP as the sole measure of government debt. We also recommend the use of alternative indicators and the consolidation of a composite debt index derived from globally recognized indicators of government indebtedness.