NEW YORK, August 4. /TASS/. Most Group of Seven (G7) nations, with the exception of Germany and Canada, devote more budgetary funds to public debt servicing than to defense, Bloomberg reported, citing calculations by Scope Ratings.
According to the agency, Italy's debt servicing costs exceed its defense budget nearly threefold, while the United States spends more than twice as much on debt interest as on defense. In the UK and France, debt servicing costs are twice defense spending. Meanwhile, Germany’s interest payments on bonds represent 35% of its defense expenditures. The agency provided no data for other G7 countries.
"While most sovereigns have so far avoided acute refinancing stress, elevated debt burdens, combined with relatively large primary deficits, are raising the sensitivity of public finances to changes in market funding conditions," said Eiko Sievert, executive director for Sovereign & Public Sector at Scope.
According to him, the United States, Japan, and France will encounter historically high national debt servicing costs over the next five years.