11.5.5—External debt

External debt is the stock of liabilities owed to non-residents. It can be public or private, short or long term, and denominated in domestic or foreign currency.

Debt sustainability depends on interest rates, growth, export earnings, exchange rates, maturity, rollover risk and what the borrowing financed. Foreign-currency depreciation can increase the domestic burden.

A loan for an export-generating port may raise future foreign exchange earnings; a short-term dollar loan funding consumption becomes harder to service after a depreciation.

External debt is not identical to the annual current-account deficit or total national debt, and a large stock is not enough to judge sustainability without income and terms.