What is referred to as public debt?

Public debt refers to the total amount borrowed by the government, which comprises the outstanding borrowing that hasn't yet been repaid. This can include loans from various sources, such as domestic lenders, foreign investors, or international financial institutions. It reflects the aggregate of all past deficits that have not been offset by surpluses, and it is an important indicator of a government’s financial health and its ability to manage its obligations.

Understanding public debt is crucial because it influences a country’s economic policy, particularly in fiscal matters, and impacts interest rates and overall economic growth. High public debt levels can lead to concerns about sustainability, as governments need to ensure that they can meet their future obligations without compromising economic stability.