schuldengraad

Schuldengraad is a Dutch term for the degree or level of indebtedness of an actor—such as a country, company, or household. It expresses how large the debt is relative to a chosen base, most commonly gross domestic product (GDP) for government debt, income for households, or total assets for firms. As a macroeconomic indicator, the schuldengraad helps policymakers and analysts assess vulnerability to interest rate shifts and funding risk.

Calculation and variants: For governments, the conventional measure is the public debt-to-GDP ratio: schuldengraad = (government debt) / GDP × 100. For households, debt-to-income or debt-to-asset ratios are used, and for firms, leverage ratios compare debt to equity or to assets. The base and whether to measure gross or net debt affect interpretation. The concept can be applied at different levels of aggregation and with different currencies or measurement standards.

Interpretation: A higher schuldengraad signals greater indebtedness relative to the base, which can indicate limited fiscal or financial flexibility and a higher burden of debt service. However, it does not on its own determine solvency or liquidity; it must be interpreted together with factors such as interest rates, growth prospects, debt composition, maturity structure, and revenue or income dynamics.

Applications and limitations: The schuldengraad is used in fiscal policy assessment, credit analysis, and international comparisons. Cross-country comparability requires consistent methodologies, as differences in accounting, currency composition, inflation, and financial structure can distort comparisons. It is one of several indicators of debt sustainability rather than a complete measure of financial health.