Page 129 - Macroeconomics. book docx_Neat

Public debt refers to the total amount of money the government owes to domestic and

foreign creditors.

External debt is the portion of public debt borrowed from foreign sources.

Causes of Public and External Debt

- Persistent budget deficits

- Financing development projects

- Economic crises

- Exchange rate depreciation

Effects of Public and External Debt

- High interest payments

- Pressure on government budgets

- Reduced economic growth

- External vulnerability

Debt Management Policies

- Improving debt efficiency

- Promoting economic growth

- Export expansion

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