Working Paper 04
How the largest economies fund debt service
September 2026
Abstract
This note separates interest expenditure, principal refinancing, and primary deficits for the United States, China, Germany, Japan, and India. US central-government interest expenditure rose from 10.9% of revenue in 2020 to 20.3% in 2024, while India’s 2022 burden was 34%; interest accounted for about 45% of US net borrowing in 2023 and 93% of India’s aggregate borrowing requirement over 2015–2022. Refinancing represented about 93% of US gross issuance in 2024 and 83% of Japan’s FY2025 issuance; Germany’s latest observed interest burden was 2.5% of revenue, China’s was 3.4% in 2021, and Japan’s FY2025 interest budget was ¥10.5 trillion.