1) Fiscal Deficit = primary deficit + interest payments 2) Nominal debt change = primary deficit + interest payments − (sovereign rights + privatisation) 3) Interest payments = nominal interest rate * nominal debt 4) The faster the economy grows, the lower the debt to GDP ratio remains. 5) If part of the debt is denominated in dollars, then a nominal revaluation (or devaluation) will increase (reduce) the debt level in local currency, 6) Moreover, the debt increases when the government is bailing out banks. |