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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