How does a debt ratio work?
There is a difference between the budget and the debt ratio. In terms of budget, Woerden manages it all, about as much money comes in as is spent on an annual basis. This does not include very large and expensive projects (Rembrandt Bridge), which are accepted and paid off over several years. You’re talking about the debt ratio. This currently stands at 127 percent for Woerden. In euros, this is about 208 million euros.
The debt-to-GDP ratio is the ratio of debt to total revenue in the budget. The debts are calculated by dividing them by the income, so:
• If debts rise and revenues remain the same, the debt-to-GDP ratio rises.
• If debts fall and revenues remain the same, the debt-to-GDP ratio falls.
• If revenues rise and debt remains the same, the debt-to-GDP ratio decreases.
• If revenues fall and debt remains the same, the debt-to-GDP ratio rises.