37 This relationship is expressed by the following formula:
bt = dt + bt-1[(l + r)/(l + g)]
bt : current term debt outstanding (relative to nominal GDP)
bt-1: preceding term debt outstanding (relative to nominal GDP)
dt : current term primary deficit (relative to nominal GDP)
r : nominal interest rates
g : nominal GDP growth rates
The formula indicates that when nominal interest rates and nominal GDP growth rates are equal (r = g) and primary balance is achieved (d = 0), the current term debt outstanding is equal to the preceding term debt outstanding (bt = bt-1).