Examples of External Debts
- At the end of March 2023, India’s external debt amounted to USD 624.7 billion and it was USD 5.6 billion more than the year March 2022.
- In case, country A needs funds to recover from the effects of natural disasters, and country B is ready to help, then country A should take the loan and repay it timely to avoid the negative impact of external debts.
External Debt | Types, Effects, Merits and Demerits
External Debt can be defined as money borrowed from outside the country from sources like foreign governments, International Monetary Funds (IMF), Foreign Direct Investments (FDI), Foreign Portfolio Investments (FPI), etc. As people and businesses sometimes need to borrow money to pay their expenses, the same goes for the government of any country. The government sometimes may need to borrow money from either inside the country or outside the country. The borrowed money is known as Debt, and the modes of borrowing money can be classified into two categories – External Debt and Internal Debt.