44. Debt service as a percentage of exports of goods and services



External debt service refers to principal repayments and interest payments made to nonresidents in foreign currency, goods or services. Long-term refers to debt that has an original or extended maturity of more than one year.


Exports of goods and services comprise sales, barter or gifts or grants of goods and services from residents to non-residents. Where exports of goods are valued f.o.b., the costs of transportation and insurance up to the border of the exporting country are included in exports of goods. Other transactions involving a mixture of goods and services, such as expenditures by foreign travellers in the domestic market, may all have to be recorded under services in the rest of the world account. Export receipts along with worker remittances received from abroad provide the foreign exchange proceeds for meeting external debt service obligations.


Goal/targets addressed

Goal 8. Develop a global partnership for development.

Target 12. Develop further an open, rule-based, predictable, non-discriminatory trading and financial system. Includes a commitment to good governance, development and poverty reduction—both nationally and internationally.

Target 13. Address the special needs of the least developed countries. Includes: tariff and quota-free access for least developed countries’ exports; enhanced programme of debt relief for HIPCs and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction.

Target 14. Address the special needs of landlocked countries and small island developing States (through the Programme of Action for the Sustainable Development of Small Island Developing States and the outcome of the twenty-second special session of the General Assembly).

Target 15. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term.



The targets on debt relief also address the need to make debt sustainable in the long term. The indicator is one measure of whether debt levels are sustainable.


Method of computation

The indicator is calculated as the ratio of external debt service to exports of goods and services, expressed as a percentage.


Data collection and source

The World Bank collects data on indicators of finance, published annually in Global Development Finance.



Global Development Finance, vol. 2, Country Tables, annual, World Bank

System of National Accounts, 1993, United Nations, Commission of the European Communities, International Monetary Fund, Organisation for Economic Co-operation and Development and World Bank, series F, no. 2, rev. 4 (United Nations publication sales no. E.94.XVII.4, paras. 14.88 and 14.90).


Periodicity of measurement



International data comparisons

International Monetary Fund, www.imf.org/external/np/exr/facts/hipc.htm.

World Bank, www.worldbank.org/hipc.


Comments and limitations

Small, open economies may have relatively high levels of exports (and imports) and yet may face problems in meeting debt service obligations, particularly when debt service payments due on public debt are high relative to government revenue. A large economy may have proportionately smaller exports and still find its debt payments sustainable. For this reason, it is useful to look at other indicators, such as the ratio of total debt to gross national income, the size of international reserves relative to total debt and debt maturing within a year’s time, in forming a picture of debt sustainability.



International Monetary Fund.

World Bank.