cover image: The federal debt and rising interest rates : Dette fédérale et hausse des taux d'intérêt : doit-on s'inquiéter?

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The federal debt and rising interest rates : Dette fédérale et hausse des taux d'intérêt : doit-on s'inquiéter?

23 Mar 2010

The purpose of this paper is to evaluate likely changes in the national debt and the cost of servicing the debt using various economic growth and interest rate increase scenarios. [...] As a result, the difference between government’s revenues and expenditures was higher than the cost of servicing the debt and would have been higher than the cost of servicing the debt had the cost of servicing the debt stayed at its peak 1995 level. [...] These two factors served to reduce the relative size of the federal debt as a proportion of the Gross Domestic Product (GDP), from 63% to 29%, and reduced the annual cost of servicing the debt by 6 $9.8 billion. [...] The gross debt is made up of the market debt (62%), the pension plan and other liabilities (23.7%), creditors and accrued liabilities (13.9%), and changes in the value of market debt and lease and purchase agreements (0.4%). [...] FEDERAL DEBT – SCENARIOS Changes in the federal debt and the cost of servicing it are likely to be influenced by two key factors: the country’s economic growth and the expected increase in market interest rates.
government politics budget economics economy finance fiscal policy recession budget deficits debt economic growth economic policy interest interest rates investments government budget bank of canada government debt economies fiscal budgets and budgeting federal debt debts, public the federal debt

Authors

Roy-César, Édison

Pages
9
Published in
Canada

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