In which ways do governments pay back public debt
- through fiscal and taxation policies
- By use of benefits or profits from state enterprises or accumulated revenue from penalties
- Use of accumulated foreign reserves or through surplus financing
- Borrowing from internal sources in order to service the loan
- Issue new government stock, bonds, shares securities which are redeemable
- Export promotion: production for export market should be encouraged so that adequate foreign exchange revenue is realized to pay of the pending external debt.
- Debt cancellation or debt wave off.
- Barter trade which minimizes the use of foreign exchange
- Privatization: public enterprises are privatized to raise income to settle the debt
- Obtaining fresh debts from a different country to pay old debts
- Debt re-rescheduling i.e. bargaining with creditor to change the dates of repayment.
- Selling foreign investments to raise money to pay foreign debts.
- Defaulting i.e. cancellation or refusal to pay indefinitely.
- Operation of surplus budget. The extra funds raised in the budget is used to pay the debt
- Printing of more money: an expansionary monetary policy is used to cover internal public debts.
CATEGORIES Economics
TAGS Dr. Bbosa Science
