SOVEREIGN DEBT

31 May 2016 By PDSNET

A government's debt, mostly in the form of long-term government bonds. The interest cost of this debt obviously reduces the proportion of revenue available for social spending. The government's debt is rated by the international ratings agencies and in mid 2016 the country was barely holding on to its investment grade rating. A downgrade to junk status would result in a much higher interest cost.



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