External debt

External debt is when a country borrows money from another country or from private lenders. It's a bit like borrowing money from your grandparents or taking out a loan — except in this case, the country is the one borrowing. It's important for countries to have external debt because it can help them find money to do things like build roads, schools, or hospitals. But it can also be dangerous if a country takes on too much debt and can't pay it back.