Public debt is defined by law as the outstanding balance of government financial obligations that are unpaid and require repayment in order to meet its commitments. External public debt: is the portion of a country’s debt borrowed from foreign countries, entities and international institutions where the government is required to pay back in accordance with the law. Internal public debt is the sum of funds borrowed by the government under government bonds, or from local banks or other domestic financial institutions and is obligated to pay back1.
Public debt laws generally set a ceiling for public debts (a percentage of the GDP) that must not be exceeded, while some laws link it to current prices others link it to fixed prices. The Palestinian law linked it to the current prices, not to exceed 40% of the GDP.
