Modelling Debt to GDP Ratios for Canada, Japan and The U.K.

With the global impact of the 2020 Novel Coronavirus (COVID-19), there has been a surge in public debt and uncertainty in the global economy. As the likelihood of a recession and a higher debt for Canada increases, the utility of a forecasting model is a realistic choice to both predict and determine optimal fiscal decisions for the government. This paper seeks to ratify existing historical trends in three developed economies (Canada, Japan, and the U.K.) as well as offer a time series forecast for the proceeding five years’ debt to GDP ratio. As per the International Monetary Fund (IMF), a limit of 60% in debt to GDP ratio was employed to measure how far off these three countries were from a considerably recoverable amount of debt. The time series forecast that the U.K. will drop to 65.436% by 2025, however, Japan and Canada will continue to accumulate debt to 254.3851% and 80.107% respectively.

受2020年新型冠状病毒（COVID-19）全球大流行的冲击，全球公共债务规模急剧攀升，全球经济不确定性显著上升。随着加拿大经济陷入衰退、公共债务高企的风险持续加大，构建可同时实现经济预测、辅助政府制定最优财政决策的预测模型，已成为切实可行的务实选择。本文旨在验证加拿大、日本与英国这三个发达经济体的既有历史趋势，并对未来五年的债务占国内生产总值（Gross Domestic Product，GDP）比率开展时间序列预测。根据国际货币基金组织（International Monetary Fund，IMF）的衡量标准，债务占GDP比率60%的警戒线被用于评估这三个经济体距离可合理清偿的债务规模尚存多少差距。本次时间序列预测结果显示，英国的债务占GDP比率将在2025年降至65.436%，而日本与加拿大的债务规模则将持续攀升，分别达到254.3851%与80.107%。