According to the regulations of the International Monetary Fund and the World Bank, foreign debt refers to the contractual debt that residents of a country bear to non-residents at any given time, excluding direct investment and enterprise capital. Simply put, foreign debt is a country's debt to foreign countries, and the foreign debt of various countries is also the debt of various countries to foreign countries.

The role of foreign debt

The role of foreign debt can be divided into positive and negative roles:

1, the positive role is to raise funds for investment, thus promoting national economic growth or making up the fiscal deficit. Foreign debt can also be used in international trade to make up for the temporary shortage of foreign exchange. Foreign debt can help a country in a state of persistent trade deficit to make up the trade deficit by borrowing foreign debt without using its own reserves, so that the international balance of payments can reach a balanced state;

2, foreign debt may also bring adverse effects, moderate foreign debt can promote a country's economic growth, but too much foreign debt may also make a country's economic pressure huge, so every country should control foreign debt within a reasonable range.