Answer to Question #89886 in Macroeconomics for Rosie

Question

The inability to fund investment with internal savings suggests the need to borrow the required funds elsewhere. On the other hand, the presence of excessively high levels of foreign debt relative to GDP may suggest a need to constraint current investment (and consumption) expenditures in order to service the debt load.

Answer 1

So, there may be an apparent relationship between low savings ratios and the ratio of foreign debt to GDP.