29 The relationship between public debt and nominal interest rates, nominal growth rate is expressed by the following formula.

bt = dt + bt-1[(l + r)/(l + g)]

where,

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 (dt = 0), the current term debt outstanding is equal to the preceding term debt outstanding (bt = bt-1).