An analytical reading of the importance of the public debt-to-GDP ratio in achieving financial sustainability in Algeria

Abstract

This research aims to study and analyze the suitability and accuracy of the public debt-to-GDP ratio. This indicator, frequently used to measure fiscal sustainability, is the subject of ongoing debate among researchers, economists, and academics regarding its application to the Algerian economy. Using a descriptive and analytical approach, a scientific research methodology, we concluded that the public debt-to-GDP ratio is an inaccurate indicator and does not fully reflect the Algerian economy's capacity to achieve fiscal sustainability, for several reasons. It does not take into account the true ratio of public debt. Differences in public debt between countries are explained by their distinct economic, political, and social characteristics. Long-term public debt sustainability also depends on the relationship between economic growth and real interest rates. Furthermore, given that the risks associated with public debt are multifactorial, it is preferable to use more precise indicators