External Debt — Definition

Definition

External debt is the stock of actual debt liabilities owed by residents of an economy to non-residents, requiring future principal or interest payments. Residence, rather than currency or citizenship alone, determines the cross-border classification.

It can include liabilities of government, banks and other resident borrowers. The total is therefore broader than sovereign debt. Analysis also needs the reporting date, payment schedule, currency composition and valuation basis.

A headline stock does not reveal how much is due during a particular year or whether every borrower can meet its obligations.