This indicator measures the balance between a government's new liabilities and its financial resources relative to its overall economic output. It encompasses both domestic and foreign borrowing, illustrating how governments manage budget deficits through external funding sources while also reflecting domestic financial engagement. The significance lies in understanding how effectively a government balances its fiscal strategies, highlighting the dependency on external capital or domestic expenses to finance public services and investments. Additionally, it emphasizes the importance of net financial asset acquisition, showing the interplay between liabilities and assets, which ultimately impacts economic stability and fiscal health. Monitoring this ratio provides insights into a country’s financial resilience and strategic resource allocation.
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