1. Absolute quantity index
Generally speaking, there are the following indicators to measure the absolute amount of public debt.
(1) The total public debt, also known as the balance of public debt, refers to the total existing and unpaid debts of the government. This indicator reflects the total size of government debt. In the absence of short-term bonds, the total amount of bonds is the sum of the amount of newly issued bonds in the current year and the accumulated balance of bonds over the years.
(2) The amount of public debt issuance refers to the amount of debt issued by the government in a certain year. This indicator measures the amount of public debt from the perspective of government revenue. In the case of parity issue, if the issue fee and other factors are not considered, the amount of national debt issued is the national debt income of that year.
(3) The amount of debt service refers to the amount of government debt service in a certain year. This indicator measures the government's debt burden from the perspective of government expenditure. The government can only use the net income of public bonds when the amount of public bonds issued is greater than the amount of debt service.
2. Relative quantitative index
The scale of public debt can be measured by absolute and relative indicators. Moreover, because the relative number index comprehensively considers the relationship between the amount of public debt and the national economy and financial situation, it is more universal. There are three relative indicators of public debt in the world, namely, the dependence of public debt, the burden rate of public debt and the debt service rate of public debt.
(1) public debt burden rate. The public debt burden rate refers to the proportion of public debt balance to the GDP of that year. Expressed by the following formula:
Public debt burden ratio =
Balance of public debt this year
× 100%
Current gross domestic product
This indicator reflects a country's macro-economy ability to bear government debt. Generally speaking, the higher the public debt burden rate, the greater the ability of the national economy to bear the debt burden and the stronger the financial solvency.
(2) Dependence on public debt. Dependence on public debt refers to the proportion of public debt issuance in that year to fiscal expenditure in that year. Expressed by the following formula:
Dependence on public debt =
Number of bonds issued this year
× 100%
Recurrent financial expenditure
This index includes two calculation criteria: when the denominator is the total expenditure of state finance, it is called the dependence of state finance on public debt; When the denominator is the total expenditure of the central government, it is called the dependence of the central government on public debt. This indicator reflects the dependence of a country's fiscal expenditure on public debt. The greater the dependence on public debt, the weaker the financial foundation, the higher the dependence on debt income, and the greater the potential financial risks.
(3) Debt service ratio. The debt service rate of public debt refers to the proportion of debt service of public debt to the fiscal revenue of the current year. Expressed by the following formula:
Debt service ratio of public debt =
Repayment and interest of public debt in the current year
× 100%
Current fiscal revenue
The debt service ratio index of public debt reflects the financial ability to repay the principal and interest. The higher the debt service rate of public debt, the less the share of revenue available for fiscal control after deducting the debt service expenditure of public debt, and the greater the pressure on fiscal revenue.
In addition to the above three indicators, other reference indicators can be used to measure the scale of public debt. For example, the proportion of public debt issuance to national income in that year, the proportion of debt service to fiscal expenditure in that year, and so on.