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Government debt
There are two standard ways to measure the extent of government debt – by reference to gross financial liabilities or by reference to net financial liabilities – the latter being measured as gross financial liabilities minus financial assets. Gross financial liabilities as a percentage of GDP is the most commonly used government debt ratio and is shown here.
Definition
For most countries, gross financial liabilities refer to the liabilities (short and long-term) of all the institutions in the general government sector, as defined in the 1993 System of National Accounts (SNA) or in the 1995 European System of Accounts (ESA). However, for Luxembourg the definition of debt applied under the Maastricht Treaty has been used. The Maastricht definition of debt essentially differs from the SNA definition in two respects. First, gross debt according to the Maastricht definition excludes trade credits and advances, as well as shares and insurance technical reserves. Second, government bonds are valued at nominal values instead of at market value or issue price plus accrued interest as required by the SNA rules. The United States and Canada also value government bonds at nominal value.
In principle, debts within and between different levels of government are consolidated; a loan from one level of government to another represents both an asset and an equal liability for the government as a whole and so it cancels out (is "consolidated”) for the general government sector.
Comparability
The comparability of data can be affected in two ways. First, national differences in implementing SNA/ESA definitions can affect the comparability of government debt across countries. Second, changes in implementing SNA/ESA definitions can affect the comparability of data within a country over time.
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Long-term trends From 1990 to 1996, government gross financial liabilities were rising in most countries. Since then, government debt has been decreasing as a percentage of GDP in many of the 28 countries in the table. There are, however, exceptions: government debt ratios continued to increase particularly fast in Japan and Korea and significantly in France, Germany, Greece and Portugal. Korea’s government debt ratio rose by over 8% per year from 1990 to 2005 but this is measured from a very low initial rate and by 2005, Korea’s government debt ratio was still among the lowest in the OECD. In 2005, government debt ratios exceeded 100% in Greece, Italy and Japan and was close to 100% in Belgium. Most countries were in a band between 40% and 70%, with two countries reporting debt ratios of under 20% – Australia and Luxembourg. |
Source
- OECD (2007), OECD Economic Outlook: December No. 80 – Volume 2006 Issue 2, OECD, Paris.
Further information
Analytical publications
- OECD (2002), Debt Management and Government Securities Markets in the 21st Century, OECD, Paris.
- OECD (2006), Credit Risk and Credit Access in Asia, OECD, Paris.
- OECD (2006), OECD Economic Surveys, OECD, Paris.
Statistical publications
- OECD (2006), National Accounts of OECD Countries, OECD, Paris.
- OECD (2006), Central Government Debt, OECD, Paris.
Online databases
Websites
- OECD Economic Outlook – Sources and Methods, www.oecd.org/eco/sources-and-methods.
| Texts | |
| • | Indicator web page |
| • | Indicator in PDF |
| Tables (xls) | |
| • | General government gross financial liabilities |
| Graphics | |
| • | General government gross financial liabilities |
General government gross financial liabilities
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