Rising Government Debt Interest Payments Bring Uneven Economic Effects

Governments borrow money and must pay interest on it.

Those interest payments are becoming more expensive.

This is not equally bad news for everyone.

The situation is different from the decade after the global financial crisis.

Back then, governments could borrow at interest rates close to zero.

Their economies were growing faster than the interest costs, which made debt easier to manage.

Now governments have more debt and face higher interest rates.

Growth has also slowed, making the debt burden harder to handle.