Capital Markets: Observations & Insights
But Low Interest Rates Keep Debt Service Down Degrees of Debt
• Falling interest rates have allowed many countries to reduce debt service ratios
‒ China’s debt service ratio is an outlier—up significantly and close to its highs
= current
Debt Service Ratio
25%
= 10-yr range
20%
In contrast to high debt levels, debt service ratios are relatively low
15%
10%
5%
0%
Source: Bank for International Settlements, June 2018. Debt Service Ratio is the share of income used for interest payments and amortizations in the non-financial private sector.
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