Bloomberg: Most G7 nations spend more on debt than defence

Most Group of Seven (G7) countries spend more on servicing their public debt than on defence, with Germany and Canada the only exceptions, Bloomberg reports, citing calculations by Scope Ratings.

The report said Italy spends nearly three times more on debt servicing than on defence, while the United States spends more than twice as much.

In the United Kingdom and France, debt servicing costs are almost double defence spending.

In Germany, interest payments on government bonds amount to 35% of defence expenditure.

Bloomberg did not provide figures for the remaining G7 members.

Scope Ratings analyst Eiko Sievert made it clear that although most G7 sovereign issuers have not yet faced an acute refinancing crisis, elevated debt burdens combined with relatively high primary budget deficits are increasing the sensitivity of public finances to changes in money market conditions.

Sievert added that the United States, Japan and France are expected to face historically high debt servicing costs over the next five years.

By Bakhtiyar Abbasov