Public or government debt is the debt owed by state institutions (or central government).
As the government draws its income from much of the population, government debt is an indirect debt of the taxpayers.
Government debt can be categorised into internal debt (owed to lenders within the country) and external debt (owed to foreign lenders). Governments usually borrow by issuing securities, government bonds and bills. Less creditworthy countries sometimes borrow directly from a supranational organisation (e.g. the World Bank) or international financial institutions.
Czechs belong among the least indebted Europeans, as public debt accounts for around 40% of GDP. Private debt is also relatively small, with total bank loans being at only 40% of GDP.
Similarly to others, however, the trend is the main worry here. The country has been running a budget deficit of more than 3% of GDP over the last decade, while overall public debt has tripled since 2000. Japan, where public debt increased from 91% in 1995 to over 200% in 2010, serves as a worrying example.
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