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The US debt is more than 100% of GDP ... It's not necessarily a problem so long as the debt-financed spending accelerates growth. GDP is the amount the economy
by zhemao 10y ago
The US debt is more than 100% of GDP ...
It's not necessarily a problem so long as the debt-financed spending accelerates growth. GDP is the amount the economy generates per year. Debt is relatively fixed (unless you borrow more or have a crazy interest rate). As long as the interest on public debt doesn't outpace the tax revenues set aside to service it, they should be fine. Djibouti is a relatively undeveloped country, so infrastructure development can bring them a long way.
- notahacker 10y agoDebt as a proportion of GDP is less of a problem when a nation owes it mostly in its own currency to its own citizens, mind you. Djibouti's national debt seems to be projected to remain fairly stable as a proportion of GDP though, which is a better fiscal position than many.