Near-crippling, too, are levels of debt servicing and obligatory pension payments to former public-sector officials.
Debt servicing, which a decade ago ate up two-thirds of export revenues, now absorbs less than a quarter.
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That will now have to rise to around 3.3%, merely to compensate for the extra cost of debt servicing.
Last month, the budget deficit was revised again, to 22% of GDP, as debt servicing obligations and military spending mounted.
In the past, he has maintained that the Soviet Union could double or triple its debt without any debt servicing problems.
Some two-thirds of the budget goes on military spending and debt servicing.
As long as economic conditions remain supportive, the incoming government will have ample resources to devote to social spending without jeopardising debt servicing.
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Above all, it will free aid funds, part of which might otherwise have had to be assigned to debt servicing, for social and economic reconstruction.
The revision in the bank line ratings reflects delays in debt servicing by the company in the month of March, 2012, said the rating company.
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The fiscal position's vulnerability to a softening of international oil prices, combined with Mr Correa's weaker commitment to debt servicing, could cast doubt on the country's payments capacity.
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He has stated that the terms of Ecuador's bond restructuring following the 1999 default were too favourable to bondholders and has hinted that social spending will take priority over debt servicing.
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Second, Western leaders including President Bush are becoming increasingly and properly nervous that a potential collapse of the Soviet economy and debt servicing capability could be tied to them personally.
Although it does not call for a default on Brazil's public debt, as it once did, it talks of capping the share of tax receipts that goes on debt servicing, which does not sound very different from defaulting.
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With debt servicing now the biggest item in the budget after labour and social affairs, with few valuable state assets left to sell, and with the need to respect the toughish debt criteria for countries that have adopted Europe's single currency, the government faces overwhelming pressure to show thrift.
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.
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