Net Government Interest Costs as a Percentage of GDP

Japan is the most indebted country in the world. Japan’s debt as a percentage of GDP is more than double that of the US. However Japan’s costs to service its national debt is much lower than that of the US as shown in the chart below.

The following chart shows the Net Government Interest Costs as Percentage of GDP:

Click to enlarge

Exhibit 6: Net government interest costs (% of GDP)
Source: Deutsche Bank Research

Source: Another Zimbabwe In the Offing? by Niels Clemen Jensen, Absolute Return Partners

The reason for the low level of debt servicing cost in Japan is in the very low interest rate there according to the author of the above piece.

Unlike Japan, the cost servicing the national debt is much higher for the US. Currently the outstanding US public debt is over $22 Trillion according to the Treasury Department. The interest expense on the outstanding debt in 2018 was over $523 billion.

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