PROBLEMI SVETSKOG DUGA
PROBLEMS OF WORLD DEBT

Summary/Abstract: This paper analyzes the problem of world debt of high-income European countries in the euro zone, the U.S., Japan and the BRIC countries with a lower level of debt as special reference to the amount of Serbia's debt to GDP ratio. Level of indebtedness occurs with increasing trade deficit and capital inflows. The ratio of debt to GDP is an important indicator. Countries with lower credit ratings have to take credits with high interest rates. But high public debt as a phenomenon has also occurred in most developed countries. A debt crisis occurs as a consequence when a country is not able to repay its debt anymore with a high inflation rate. Sustainability of public finances is in direct correlation with the level of debt in a country, its credit rating and credit risk.

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