The heavier burden of debt-servicing costs will constrain consumer budgets over the next year or so.
That alone has saved the chaebol millions of dollars by lowering their debt-servicing burden.
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It thinks that the squeeze on the consumer, caused by rising taxes and debt-servicing charges, is abating.
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But debt-servicing costs would still leave an overall deficit of 6.8% of GDP.
That would sharply raise debt-servicing costs, pitching the government into a downward spiral of surging interest rates and rising deficits.
When this is taken into account, the debt-servicing ratio is close to its previous peak when the base rate stood at 15%.
Debt-servicing aside, the government is running a healthy and growing budget surplus.
In Tanzania, the government devotes three times more to debt-servicing than to education, on which spending has dropped two-thirds in a decade.
The president-elect has pledged to retain dollarisation, but his commitment to reducing the country's debt-servicing ratios has raised the prospect of another default.
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He appealed to Europe and the United States for a reduction in debt-servicing and other modest financial support, but was turned down by the creditor governments.
According to Morgan Stanley, an investment bank, debt-servicing costs are at their highest as a share of disposable income since the recession of the early 1990s (see chart).
This home bias also helps explain why, though the stock of debt is huge, debt-servicing costs as a percentage of GDP have been relatively low compared with Japan's OECD peers (see chart).
When the debt on which interest is paid equals the GDP level of a nation, the economy must grow faster than the interest rate to avoid debt-servicing costs consuming all the benefit of economic growth.
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The pitfalls of PE investment in startups are several: First, firms that have been bought out by private equity oftentimes get bogged down by an excessively hefty debt-servicing burden and have a higher probability of going bankrupt.
The government's debt-servicing costs are too high?
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But since interest rates cannot be sustained at current levels without adding unbearably to the budget through extra debt-servicing costs, the only hope of restoring market confidence after the election will be a far more drastic fiscal squeeze.
In the 1995 Kobe-Kansai earthquake, local governments provided interest subsidies residents servicing pre-existing debt.
Near-crippling, too, are levels of debt servicing and obligatory pension payments to former public-sector officials.
Indeed, it is membership of the euro that has made Italy's public-debt burden bearable by cutting its servicing costs sharply.
For one, if the ECB were to give the euro a gold definition, the cost of servicing euro-denominated debt for Greece and Ireland would decline.
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The argument for not investing in a 401(k) stems from the possibility that the cost for servicing high-interest debt may outweigh the potential performance on retirement plan assets.
Debt servicing, which a decade ago ate up two-thirds of export revenues, now absorbs less than a quarter.
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Some two-thirds of the budget goes on military spending and debt servicing.
The president and many in Washington are complacent because, thanks to the Fed's unprecedented near-zero interest rate policy, the burden of servicing the debt today is just 0.9% of GDP, the lowest level in over five decades.
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About half of mortgage borrowers have variable-rate loans and are therefore generally benefiting from the reduced cost of servicing their debt.
As for projects never being completed, one need look only to California where the early 1990s bust in Mello-Roos development districts left undeveloped projects with bonds which to this day are not servicing their debt.
Servicing this debt already requires the government to run a primary fiscal surplus (that is, before debt-service costs) of around 4% of GDP, and some economists think it will need to be even more.
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