Public Debt and the Covid-19 Pandemic: Reality and Interconnectedness

Tsinaridze Ramin, Lasha Beridze


In the process of fulfilling their functions and obligations, states often find themselves in a situation where their own financial resources are not sufficient to achieve the set goals and objectives.Under such conditions, in order to finance government expenditures and the formation of budget revenues, it is necessary to attract domestic and foreign loans, which leads to the emergence and growth of both domestic and foreign debt.

Borrowing in the face of globalization should not be considered a sensation.At the modern stage, capital has taken on the character of international mobility and it is constantly moving from country to country in order for its owner to make more profit.The unequal level of development of countries, their division into developed and developing countries gives the flow of capital movement in a largely one-way direction.

Effective management of public debt, including the external debt component, is essential to ensure Georgia's fiscal sustainability.Borrowing public debt is sound in the face of economic growth, but if payments for foreign debt services are growing faster than foreign exchange earnings, then there are problems with the balance of payments and the state budget.

The action of any government in obtaining loans is conditioned by its financial condition.The larger the volume of government loans, the higher the share of public debt to GDP, the deeper the financial crisis.The best indicator of public debt sustainability is its ratio to nominal GDP.


public debt, economic development, gross domestic product, financial crisis, securities


Antonio Afonso, Jose Alves, The Role of Government Debt in Economic Growth, September, 2014, p. 2

El-Mahdy, Adel M., and Neveen M. Torayeh. 2009. Debt Sustainability and Economic Growth in Egypt.International Journal of Applied Econometrics and Quantitative Studies 6: p. 21–55.

Herman Ricardo Bricero, Javier Perote, Determinants of the public Debt in the Eurozone and its Sustainability Amid the Covid-19 pandemic, sustainability, 2020, p. 2

Pattillo, Catherine A., Helene Poirson, and Luca A. Ricci. 2004. What Are the Channels through Which ExternalDebt Affects Growth? International Monetary Fund Working Paper No. 04/15; Washington: InternationalMonetary Fund.

Panagiotis, p., ,,The effect of Govermenet Debt and Other Determinants on Economic Growth: The Greek Expericence”, paper - ecomies, 2018, p. 2-3

Reinhart, Carmen, and Kenneth Rogoff. 2010. Growth in a Time of Debt, American Economic Review. AmericanEconomic Association 100: p. 573–78.

Reinhart, CarmenM., Vincent R. Reinhart, and Kenneth S. Rogoff. 2012. Public Debt Overhangs: Advanced-EconomyEpisodes since 1800. Journal of Economic Perspectives 26: p. 69–86.

Schclarek, Alfredo. 2004. Debt and Economic Growth in Developing and Industrial Countries. Working Papers 2005: 34.Lund: Lund University, Department of Economics.

Shah, Mahmud Hasan, and Pervin Shahida. 2012. External Public Debt and Economic Growth: Empirical Evidencefrom Bangladesh. Academic Research International 3: p. 508–15.

Sen, Swapan, Krishna M. Kasibhatla, and David B. Stewart. 2007. Debt Overhang and Economic Growth theAsian and the Latin American Experiences. Economic Systems 31: p. 3–11.

International Journal of Applied Econometrics and Quantitative Studies 6: p. 21–55.

International Monetary Fund, IMF Survey: Amid Crisis, IMF Emphasize, Lend Quickly, accesed March 15, 2021, accesed 20 March, 2021

Budget monitoring, Relation of public debt ratios to existing margins,, accesed April 25, 2021

Ministry of Finance of Georgia, Government Debt Strategy 2019-2021, ,

accesed March 10, 2021

Transparency International, article "Public Debt Accounting Methodology Does Not Comply with International Standards",, accesed March 15, 2021, p. 2,

Trading Economics, Government Debt to GDP – Forecast 2020-2022, , accesed 20 April, 2021, p. 1

Full Text: PDF

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.