In 2017, an article in the Wall Street Journal discussed a report by the World Bank. According to the report, “More than half of emerging economies saw their debt-to-GDP ratios rise 10 percentage...

In 2017, an article in the Wall Street Journal discussed a

report by the World Bank. According to the report, “More

than half of emerging economies saw their debt-to-GDP

ratios rise 10 percentage points and in a third, budget balances worsened by more than five percentage points.”

a. What does the report mean by “budget balances”?

b. Is there a connection between these countries experiencing worsening budget balances while also experiencing increasing debt-to-GDP ratios? Briefly explain.

Source: Ian Talley, “Four Risks Cloud the Outlook for the Global

Economy,” Wall Street Journal, June 6, 2017.