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French Equivalent: Remise de dette - MBP

Debt forgiveness occurs when a government creditor entity in one economy formally agrees - via a contractual arrangement - with a debtor entity in another to forgive (extinguish) all, or part, of the obligation of the debtor entity to the creditor, the amount forgiven is treated as a capital transfer from the creditor to the debtor. That is, the balance of payments reflects a reduction of the liability offset by the transfer. Similar treatment is applicable when a government entity’s debt is forgiven by agreement with a creditor entity in another economy.

Source Publication:
BPM para. 348.

Cross References:
Debt forgiveness – SNA


Version Indicator: BPM

Statistical Theme: Financial statistics - Balance of payments

Created on Tuesday, September 25, 2001

Last updated on Monday, November 5, 2001