Debt & Reserves of Drumagh
The national balance sheet — what Drumagh owes or holds, and the credit rating that sets its borrowing cost.
Under an IMF programme IMF
Budget policy is locked under IMF conditions until the country's debt recovers. In return, debt is serviced at a discounted 5.0% a year.
Every proposed budget must run a surplus — no structural deficit.
Every tax band must be at least 40%.
The programme ends once debt / GDP falls to 100% and stays there.
National debt
Rating: IMFCredit ratings
A country's credit rating is determined by its debt as a percentage of GDP. A better rating means cheaper borrowing; a worse rating drives up the annual interest cost on outstanding debt. Countries with a reserve (negative debt) earn 2% annual interest on that reserve.
At 200%+ debt / GDP the IMF may intervene: it imposes an austerity budget and locks policy under its conditions, but discounts debt to a fixed 5.0% a year until the country recovers.