In economics and government finance, a country’s debt service ratio is the ratio of its debt service payments (principal + interest) to its export earnings.
[Glossary of Statistical Terms]
Debt service ratio
OECD
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
, Sep 25, 2001. A country's international finances are healthier when this ratio is low. For most countries the ratio is between 0 and 20%.
In contrast to the
debt service coverage ratio, which is calculated as income divided by debt, this ratio is inverse and calculated as
debt service divided by country's income from
international trade
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy)
In most countries, such trade represents a significant ...
, i.e., exports.
References
{{macroeconomics-stub
Macroeconomic indicators
Financial ratios