Debt service ratio

In economics and government finance, debt service ratio is the ratio of debt service payments (principal + interest) of a country to that country’s export earnings.[1] A country's international finances are healthier when this ratio is low. The ratio is between 0 and 20% for most countries.

In contrast to the debt service coverage ratio, which is calculated as income divided by debt, this ratio is inverse and is calculated as debt service divided by country's income from international trade, i.e. export.

References

  1. ↑ Debt service ratio, OECD
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